8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 21, 2016

CITIZENS FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-36636	05-0412693
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification No.)

One Citizens Plaza Providence, RI	02903
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (401) 456-7000

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On July 21, 2016, Citizens Financial Group, Inc. issued a press release reporting second quarter 2016 earnings and posted on its website the press release, an earnings release presentation, and a financial supplement. Copies of the press release, earnings release presentation, and financial supplement are being furnished as Exhibits 99.1, 99.2 and 99.3, respectively.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibit 99.1	Citizens Financial Group, Inc. press release dated July 21, 2016
	Exhibit 99.2	Citizens Financial Group, Inc. earnings release presentation issued July 21, 2016
	Exhibit 99.3	Citizens Financial Group, Inc. financial supplement for second quarter 2016

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CITIZENS FINANCIAL GROUP, INC.
By:	/s/ Eric Aboaf
	Eric Aboaf
	Chief Financial Officer

Date: July 21, 2016

EXHIBIT INDEX

Exhibit Number	Description
99.1	Citizens Financial Group, Inc. press release dated July 21, 2016
99.2	Citizens Financial Group, Inc. earnings release presentation issued July 21, 2016
99.3	Citizens Financial Group, Inc. financial supplement for second quarter 2016

EX-99.1

Exhibit 99.1

Citizens Financial Group, Inc. Reports Second Quarter Net Income of $243 Million;

Diluted EPS of $0.46 up 31% from second quarter 2015

ROTCE of 7.3% in second quarter 2016 compared with Adjusted 6.7%* in second quarter 2015

Positive operating leverage of over 3% on a year-over-year Adjusted basis*

Continued progress on growth initiatives; Additional TOP III efficiency initiatives launched

Completed sale of $310 million troubled debt restructuring portfolio with third quarter 2016 gain of approximately $70 million

PROVIDENCE, RI (July 21, 2016) Citizens Financial Group, Inc. (NYSE: CFG or “Citizens”) today reported second quarter net income of $243 million, or $0.46 per diluted common share, up 28% and 31%, respectively, from $190 million and $0.35 per diluted common share in second quarter 2015. Compared with first quarter 2016, net income increased 9% from $223 million and diluted earnings per common share increased 12% from $0.41. Second quarter 2015 results include an after-tax restructuring charge impact of $0.05 per diluted share, largely related to efforts to improve processes and enhance efficiencies as well as rebranding and separation from RBS. Adjusting for these charges, second quarter 2015 Adjusted* EPS was $0.40 and second quarter 2016 year-on-year improvement was 15%. Return on Average Tangible Common Equity* (“ROTCE”) was 7.3% in second quarter 2016 compared to 6.6% in first quarter 2016 and an Adjusted* 6.7% in second quarter 2015.

Chairman and Chief Executive Officer Bruce Van Saun commented, “Our second quarter results reflect consistent progress in executing well on our plan and improving our financial performance. We continue to deliver strong loan and deposit growth, and generated 8% sequential quarter fee income growth led by strong momentum in our Capital Markets business and broad strength in our Consumer segment. We are carefully balancing the need for strong expense discipline with our desire to fund the investments that will drive future growth.”

“The Federal Reserve’s non-objection to our 2016 capital plan reaffirms the progress we’ve made in our capital planning process and our commitment to prudent allocation and distribution of capital. We remain committed to delivering enhanced returns for our shareholders.”

Citizens announced the launch of the next phase of its Tapping Our Potential (“TOP”) efficiency programs, which are designed to improve the overall efficiency and effectiveness of the organization while self-funding investments that drive future growth.

Citizens has completed the previously announced sale of consumer real estate-secured loans classified as troubled debt restructurings (“TDR Transaction”). The TDR Transaction will result in a third quarter 2016 pre-tax gain of approximately $70 million on the sale of $310 million of loans held for sale. The company plans to utilize approximately 30% to 40% of the TDR Transaction gain to fund costs associated with its efficiency and balance sheet optimization initiatives in third quarter 2016.

* These are non-GAAP financial measures. Please see Non-GAAP Reconciliation Tables at the end of this release for an explanation of our use of non-GAAP financial measures and their reconciliation to GAAP. Where there is a reference to an “Adjusted” result in a paragraph, all measures that follow that “Adjusted” result are also “Adjusted” and exclude restructuring charges and special items as applicable. There were no restructuring charges or special items in first and second quarter of 2016.

Citizens Financial Group, Inc.

CFG’s Board of Directors declared a quarterly common stock dividend of $0.12 per common share payable on August 17, 2016 to shareholders of record at the close of business on August 3, 2016.

Second Quarter 2016 vs. First Quarter 2016

Key Highlights

• Second quarter highlights include net income growth of 9%, with 4% revenue growth highlighted by 2% average loan and deposit growth and a 1% improvement in the efficiency ratio* to 65%. These results helped drive a 70 basis point improvement in ROTCE* to 7.3%.

Results

• Total revenue of $1.3 billion was up $44 million, or 4%, driven by 8% noninterest income growth and 2% net interest income growth.

• Net interest income of $923 million was up $19 million, or 2%, driven by continued strong commercial and student loan growth.

• Net interest margin of 2.84% compares with 2.86% in the prior quarter, as the benefit of higher loan growth and improved loan yields and stable deposit costs was more than offset by lower investment portfolio yields and an increase in term debt borrowing costs.

• Noninterest income of $355 million increased $25 million, or 8%, with particular strength in capital markets fees and growth in mortgage banking fees and service charges from seasonally lower first quarter levels, partially offset by lower securities gains.

• Headcount down 74, reflecting the benefit of our efficiency initiatives.

• Noninterest expense of $827 million increased 2%, reflecting salaries and employee benefits, largely related to a change in timing of merit increases and incentive payments, as well as higher regulatory, fraud and insurance costs.

• Efficiency ratio* of 65% improved 1%.

• Provision for credit losses of $90 million remained relatively stable, with an $18 million decrease in net charge-offs and a $25 million reserve build tied to continued loan growth.

Balance Sheet

• Average interest-earning assets increased $3.3 billion, or 3%, driven by strong loan growth.

• Average deposits increased $2.0 billion, or 2%, reflecting growth in every deposit category.

• Nonperforming loans and leases (“NPLs”) to total loans and leases ratio improved 6 basis points to 1.01% with improvement in both the commercial and retail portfolios. Allowance coverage of NPLs improved to 119% from 113%.

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Citizens Financial Group, Inc.

• Net charge-offs improved to 25 basis points from 33 basis points, with a reduction in both commercial and retail.

• Completed $1.0 billion offering of five-year 2.550% senior unsecured bank notes.

• Capital strength remained robust with a common equity tier 1 (“CET1”) risk-based capital ratio of 11.5%. Dividend increased 20% to $0.12 per common share as of May 4, 2016.

Second Quarter 2016 vs. Second Quarter 2015

Key Highlights

• Second quarter highlights include net income growth of 28%, or 13% on an Adjusted* basis, led by a 10% increase in net interest income and a 12 basis point improvement in net interest margin, along with 3% Adjusted* operating leverage. The efficiency ratio* improved to 65% from an Adjusted efficiency ratio* of 67%.

Results

• Total revenue of $1.3 billion increased 7%, driven by strong loan growth and net interest margin improvement as well as growth in service charges and fees and capital markets fees.

• Net interest income was up $83 million, primarily reflecting the benefit of higher commercial, student, mortgage and auto loan growth, partially offset by lower investment portfolio income, which reflects a reduction in Federal Reserve Bank stock dividends, and an increase in debt borrowing costs.

• Net interest margin of 2.84% improved 12 basis points, driven by improved loan yields, which resulted from initiatives to improve pricing and portfolio mix.

• Noninterest income of $355 million declined $5 million from second quarter 2015 levels that exclude the negative impact of the reclassification of $7 million of card reward costs. Strength in service charges and fees and capital markets fees was more than offset by lower card fees due to the card reward accounting change impact in 2016, lower securities gains and lower mortgage banking servicing rights valuation.

• Noninterest expense of $827 million decreased $14 million, primarily reflecting a $40 million reduction in restructuring charges and special items. Results included a $21 million increase in salary and employee benefits largely related to a change in timing of merit increases and incentive payments as well as higher software amortization and equipment depreciation costs. Second quarter 2015 results exclude the positive impact of the reclassification of $7 million of card reward costs.

• Headcount was down 75, reflecting the benefit of our efficiency initiatives.

• Provision for credit losses of $90 million increased $13 million and reflects a $13 million decrease in net charge-offs as well as a $25 million reserve build tied to loan growth.

• ROTCE* of 7.3% improved 140 basis points and more than 60 basis points on an Adjusted basis.

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Citizens Financial Group, Inc.

Balance Sheet

• Average interest-earning assets increased $6.3 billion, or 5%, driven by strong loan growth.

• Average deposits increased $5.4 billion, or 6%.

• NPLs to total loans and leases ratio improved 8 basis points from 1.09% in the second quarter 2015, reflecting underlying improvement in retail nonperforming loans as well as the impact of the TDR Transaction that more than offset an increase in commercial nonperforming loans. Allowance coverage of NPLs improved by 5% to 119% from 114% in second quarter 2015.

• Net charge-offs of 25 basis points improved 8 basis points from 33 basis points in second quarter 2015 with improvement in both commercial and retail.

Update on Plan Execution

• Continued progress on initiatives to drive growth and enhance efficiency.

• Consumer Banking – New customer checking account households up ~3,000 from second quarter 2015 with growth of 3% in average deposits and 5% in service charges and fees. Solid progress on salesforce expansion in both Wealth Management and Mortgage Banking.

• Commercial Banking – Continued momentum with 11% average loan growth from second quarter 2015 with strength in Commercial Real Estate, Industry Verticals, Corporate Finance, Franchise Finance and Mid-corporate; Treasury Solutions fee income up 16% from second quarter 2015. Delivered strong results in Capital and Global Markets with improved client penetration and market share gains.

• Incremental revenue and efficiency initiatives are tracking as planned.

• Balance sheet optimization initiatives to improve low-cost core deposit growth and shift loan portfolio mix to higher-return categories progressing well.

• Closed TDR Transaction in third quarter 2016 at a pre-tax gain of approximately $70 million, improving underlying credit quality while providing opportunity for improved risk-adjusted returns.

• TOP II initiatives are performing well, as we remain on track to deliver $90 - $115 million of pre-tax benefits in 2016 with expense savings fully realized and revenue initiatives well underway.

• TOP III initiatives are projected to deliver 2017 pre-tax revenue and expense benefits of $73-90 million and $10-$15 million of tax benefits. These will help to fund continued investments to drive future growth, particularly in our fee-based businesses.

• Expect to utilize approximately 30% to 40% of the TDR Transaction gain to fund costs associated with TOP III initiatives as well as other balance sheet optimization efforts.

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Citizens Financial Group, Inc.

Earnings highlights										2Q16 change from
($s in millions, except per share data)	2Q16			1Q16			2Q15			1Q16						2Q15
										$			%			$			%
Earnings
Net interest income	$	923		$	904		$	840		$	19			2	%	$	83			10	%
Noninterest income		355			330			360			25			8			(5	)		(1	)
Total revenue		1,278			1,234			1,200			44			4			78			7
Noninterest expense		827			811			841			16			2			(14	)		(2	)
Pre-provision profit		451			423			359			28			7			92			26
Provision for credit losses		90			91			77			(1	)		(1	)		13			17
Net income		243			223			190			20			9			53			28
Net income available to common shareholders		243			216			190			27			13			53			28
After-tax restructuring charges and special items*	$	—		$	—		$	25		$	—			—	%	$	(25	)		(100	)%
Net income available to common shareholders excluding restructuring charges and special items*	$	243		$	216		$	215		$	27			13	%	$	28			13	%
Average common shares outstanding
Basic (in millions)		529.0			528.1			537.7			0.9			—	%		(8.8	)		(2	)%
Diluted (in millions)		530.4			530.4			539.9			(0.1	)		—	%		(9.5	)		(2	)%
Diluted earnings per share	$	0.46		$	0.41		$	0.35		$	0.05			12	%	$	0.11			31	%
Diluted earnings per share, excluding restructuring charges and special items*	$	0.46		$	0.41		$	0.40		$	0.05			12	%	$	0.06			15	%
Financial ratios
Net interest margin		2.84	%		2.86	%		2.72	%		(2	) bps					12	bps
Effective income tax rate		32.6			32.9			32.7			(26	) bps					(8	) bps
Efficiency ratio*		65			66			70			(95	) bps					(531	) bps
Efficiency ratio, excluding restructuring charges and special items*		65			66			67			(95	) bps					(199	) bps
Return on average tangible common equity*		7.3			6.6			5.9			69	bps					140	bps
Return on average tangible common equity, excluding restructuring charges and special items*		7.3			6.6			6.7			69	bps					63	bps
Return on average common equity		4.9			4.5			3.9			49	bps					100	bps
Return on average total assets		0.7			0.6			0.6			4	bps					13	bps
Return on average total tangible assets*		0.7	%		0.7	%		0.6	%		4	bps					13	bps
Capital adequacy(1)(2)
Common equity tier 1 capital ratio		11.5	%		11.6	%		11.8	%
Total capital ratio		14.9			15.1			15.3
Tier 1 leverage ratio		10.3	%		10.4	%		10.4	%
Asset quality(2)
Total nonperforming loans and leases as a % of total loans and leases		1.01	%		1.07	%		1.09	%		(6	) bps					(8	) bps
Allowance for loan and lease losses as a % of loans and leases		1.20			1.21			1.24			(1	) bps					(4	) bps
Allowance for loan and lease losses as a % of nonperforming loans and leases		119			113			114			584	bps					490	bps
Net charge-offs as a % of average loans and leases		0.25	%		0.33	%		0.33	%		(8	) bps					(8	) bps

* These are non-GAAP financial measures. Please see Non-GAAP Reconciliation Tables at the end of this release for an explanation of our use of non-GAAP financial measures and reconciliation of those non-GAAP financial measures to GAAP. All references to Adjusted results exclude restructuring charges and special items.

¹  Current reporting period regulatory capital ratios are preliminary.

²  Capital adequacy and asset quality ratios calculated on a period-end basis, except net charge-offs.

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Citizens Financial Group, Inc.

Discussion of Results:

Second quarter 2016 net income of $243 million improved from $223 million in first quarter 2016 and $190 million in second quarter 2015. Second quarter 2015 results were reduced by a net $40 million pre-tax, or $25 million after-tax, in restructuring charges and special items, largely related to efforts to improve processes and enhance efficiencies as well as rebranding and separation from RBS. Second quarter 2015 references to Adjusted* results below exclude the impact of restructuring charges and special items.

Second quarter 2016 net income of $243 million was up $20 million, or 9%, from first quarter 2016 as 4% revenue growth exceeded growth in noninterest expense of 2%. Diluted EPS growth of 12% reflects no preferred dividend in second quarter 2016.

Compared with second quarter 2015 levels, net income improved $53 million as revenue growth of $78 million was partially offset by a $26 million increase in income tax expense and a $13 million increase in provision, reflecting a reserve build largely tied to loan growth.

Restructuring charges and special items							2Q16 change from
($s in millions, except per share data)	2Q16		1Q16		2Q15		1Q16						2Q15
							$			%			$			%
Pre-tax restructuring charges and special items	$	—	$	—	$	40	$	—			NM		$	(40	)		NM
After-tax restructuring charges and special items		—		—		25		—			NM			(25	)		NM
Diluted EPS impact	$	—	$	—	$	0.05	$	—			NM		$	(0.05	)		NM
Adjusted results*							2Q16 change from
($s in millions, except per share data)	2Q16		1Q16		2Q15		1Q16						2Q15
							$			%			$			%
Net interest income	$	923	$	904	$	840	$	19			2	%	$	83			10	%
Noninterest income		355		330		360		25			8			(5	)		(1	)
Total revenue		1,278		1,234		1,200		44			4			78			7
Adjusted noninterest expense*		827		811		801		16			2			26			3
Adjusted pre-provision profit*		451		423		399		28			7			52			13
Provision for credit losses		90		91		77		(1	)		(1	)		13			17
Adjusted pretax income*		361		332		322		29			9			39			12
Adjusted income tax expense*		118		109		107		9			8			11			10
Adjusted net income*	$	243	$	223	$	215	$	20			9	%	$	28			13	%
Preferred dividend		—		7		—		(7	)		(100	)		—			—
Adjusted net income available to common shareholders*		243		216		215		27			13			28			13
Adjusted diluted earnings per share*	$	0.46	$	0.41	$	0.40	$	0.05			12	%	$	0.06			15	%

Compared to Adjusted* second quarter 2015 results, net income increased $28 million, or 13%. This reflects a $78 million increase in total revenue, partially offset by a $26 million increase in noninterest expense driven by higher salary and employee benefits expense related to the timing of merit increases and incentive payments, as well as higher provision expense. Adjusted diluted earnings per share were up 15%, reflecting a 13% increase in net income available to common shareholders and a 2% reduction in fully diluted shares outstanding.

6

Citizens Financial Group, Inc.

Net interest income										2Q16 change from
($s in millions)	2Q16			1Q16			2Q15			1Q16						2Q15
										$			%			$			%
Interest income:
Interest and fees on loans and leases and loans held for sale	$	903		$	872		$	796		$	31			4	%	$	107			13	%
Investment securities		141			145			155			(4	)		(3	)		(14	)		(9	)
Interest-bearing deposits in banks		2			2			1			—			—			1			100
Total interest income	$	1,046		$	1,019		$	952		$	27			3	%	$	94			10	%
Interest expense:
Deposits	$	63		$	60		$	60		$	3			5	%	$	3			5	%
Federal funds purchased and securities sold under agreements to repurchase		—			1			2			(1	)		(100	)		(2	)		(100	)
Other short-term borrowed funds		12			11			19			1			9			(7	)		(37	)
Long-term borrowed funds		48			43			31			5			12			17			55
Total interest expense	$	123		$	115		$	112		$	8			7	%	$	11			10	%
Net interest income	$	923		$	904		$	840		$	19			2	%	$	83			10	%
Net interest margin		2.84	%		2.86	%		2.72	%		(2	) bps					12	bps

Net interest income of $923 million increased $19 million from first quarter 2016, driven by a 2% increase in average loans, partially offset by a two basis point decrease in net interest margin. Net interest margin of 2.84% in second quarter 2016 reflects the benefit of improved loan yields and portfolio mix, which was more than offset by a reduction in investment portfolio yield largely tied to lower long-term rates as well as higher borrowing costs related to senior bank debt issuance. Deposit costs remained relatively stable, reflecting continued pricing discipline.

Compared to second quarter 2015, net interest income increased $83 million, or 10%, largely reflecting 7% average loan growth, 6% average deposit growth and a 12 basis point improvement in net interest margin. Results were driven by improved loan yields given continued pricing and portfolio optimization initiatives and higher short-term interest rates, partially offset by a reduction in investment portfolio yield driven by lower long-term rates as well as increased borrowing costs related to senior bank debt issuance. Deposit costs were stable with second quarter 2015, with continued pricing discipline despite higher rates.

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Citizens Financial Group, Inc.

Noninterest Income							2Q16 change from
($s in millions)	2Q16		1Q16		2Q15		1Q16						2Q15
							$			%			$			%
Service charges and fees	$	150	$	144	$	139	$	6			4	%	$	11			8	%
Card fees		51		50		60		1			2			(9	)		(15	)
Trust and investment services fees		38		37		41		1			3			(3	)		(7	)
Mortgage banking fees		25		18		30		7			39			(5	)		(17	)
Capital markets fees		35		22		30		13			59			5			17
Foreign exchange and letter of credit fees		21		21		22		—			—			(1	)		(5	)
Securities gains, net		4		9		9		(5	)		(56	)		(5	)		(56	)
Other income1		31		29		29		2			7			2			7
Noninterest income	$	355	$	330	$	360	$	25			8	%	$	(5	)		(1	)%

¹ Other income includes bank owned life insurance and other income.

Noninterest income of $355 million increased $25 million, or 8%, from first quarter 2016, largely driven by higher capital markets fees, mortgage banking fees and service charges and fees, partially offset by a $5 million reduction in securities gains. Capital markets fees increased $13 million, reflecting continued broadening of our capabilities and cross sell, as well as a strong increase in deal volume from lower first quarter 2016 market levels. Mortgage banking fees increased $7 million, reflecting higher application and origination volumes and improved sale volumes and spreads, as well as an improved mortgage servicing rights (“MSR”) valuation. Service charges and fees increased $6 million, largely reflecting the benefit of both higher volume from seasonally lower first quarter levels and improved pricing. Results also reflect modest growth in card fees, and trust and investment services fees and other income. Other income included strong interest rate product revenue, up $7 million, largely offset by an other-than-temporary-impairment (“OTTI”) charge of $6 million tied to a new model implementation. Securities gains decreased by $5 million.

Noninterest income decreased $5 million from second quarter 2015 levels that exclude the negative impact of $7 million of card reward costs. Service charges and fees increased $11 million, driven by both improved pricing and volume. Capital markets fees increased $5 million, to a record quarterly high, reflecting continued broadening of our capabilities and cross sell, as well as strong market deal volume. Mortgage banking income declined $5 million from second quarter 2015 levels, largely reflecting the significant second quarter 2015 MSR valuation gain. Trust and investment services fees decreased $3 million given the changing mix of product sales.

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Citizens Financial Group, Inc.

Noninterest expense							2Q16 change from
($s in millions)	2Q16		1Q16		2Q15		1Q16						2Q15
							$			%			$			%
Salaries and employee benefits	$	432	$	425	$	411	$	7			2	%	$	21			5	%
Outside services		86		91		99		(5	)		(5	)		(13	)		(13	)
Occupancy		76		76		90		—			—			(14	)		(16	)
Equipment expense		64		65		65		(1	)		(2	)		(1	)		(2	)
Amortization of software		41		39		37		2			5			4			11
Other operating expense		128		115		139		13			11			(11	)		(8	)
Total noninterest expense	$	827	$	811	$	841	$	16			2	%	$	(14	)		(2	)%
Restructuring charges and special items		—		—		40		—			—	%		(40	)		(100	)%
Total noninterest expense, excluding restructuring charges and special items*	$	827	$	811	$	801	$	16			2	%	$	26			3	%

Noninterest expense of $827 million increased $16 million from first quarter 2016, driven by higher salaries and employee benefits, largely related to a change in timing of merit increases and incentive payments, and other operating expense driven by higher regulatory, fraud and insurance costs. Results also reflect lower outside services expense, driven by our ongoing efficiency initiatives.

Compared with second quarter 2015, noninterest expense decreased $14 million, or 2%, driven by a $40 million decrease in restructuring charges and special items. On an Adjusted* basis, results reflect an increase in salaries and employee benefits, largely reflecting a change in the timing of merit increases and incentive payments that drove higher payroll taxes and retirement plan contributions, as well as increased software amortization, partially offset by the card reward accounting change impact.

The effective tax rate improved to 32.6% in second quarter 2016 compared to 32.9% in first quarter 2016 and 32.7% in second quarter 2015.

Consolidated balance sheet review(1)										2Q16 change from
($s in millions)	2Q16			1Q16			2Q15			1Q16						2Q15
										$			%			$			%
Total assets	$	145,183		$	140,077		$	137,251		$	5,106			4	%	$	7,932			6	%
Loans and leases and loans held for sale		104,401			101,742			97,235			2,659			3			7,166			7
Deposits		106,257			102,606			100,615			3,651			4			5,642			6
Average interest-earning assets (quarterly)		129,492			126,165			123,205			3,327			3			6,287			5
Stockholders’ equity		20,226			19,965			19,586			261			1			640			3
Stockholders’ common equity		19,979			19,718			19,339			261			1			640			3
Tangible common equity*	$	13,608		$	13,333		$	12,909		$	275			2	%	$	699			5	%
Loan-to-deposit ratio (period-end)(2)		98.3	%		99.2	%		96.6	%		(91	) bps					161	bps
Common equity tier 1 capital ratio(3)		11.5			11.6			11.8
Total capital ratio(3)		14.9	%		15.1	%		15.3	%

¹  Represents period end unless otherwise noted.

² Includes loans held for sale.

³  Current reporting period regulatory capital ratios are preliminary. Basel III ratios assume that certain definitions impacting qualifying Basel III capital will phase in through 2019. Ratios also reflect the required U.S. Standardized methodology for calculating RWAs, effective January 1, 2015.

Total assets of $145.2 billion increased $5.1 billion, or 4%, from March 31, 2016, driven by a $2.2 billion increase in the investment portfolio, largely cash balances, which were managed temporarily higher in connection with the U.K. European Union exit vote (“Brexit”). Results also reflect a $1.6 billion increase in commercial loans and leases and a $975 million increase

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Citizens Financial Group, Inc.

in retail loans driven by growth in residential mortgages and student, offset in part by a reduction in home equity balances. Compared with June 30, 2015, total assets increased $7.9 billion, or 6%, primarily reflecting a $7.0 billion increase in loans and leases and a $576 million increase in investment portfolio assets, largely interest-bearing cash positions.

Average interest-earning assets of $129.5 billion in second quarter 2016 increased $3.3 billion, or 3%, from the prior quarter, driven by a $2.1 billion increase in commercial loans and leases, a $324 million increase in retail loans, a $459 million increase in the investment portfolio and a $453 million increase in loans held for sale driven by the impact of the TDR Transaction.

Compared to second quarter 2015, average interest-earning assets increased $6.3 billion, or 5%, driven by commercial loan growth of $4.4 billion, retail loan growth of $2.6 billion and a $354 million increase in loans held for sale, partially offset by a $1.1 billion decrease in investments and interest-bearing cash.

Interest-earning assets							2Q16 change from
($s in millions)	2Q16		1Q16		2Q15		1Q16						2Q15
							$			%			$			%
Period-end interest-earning assets
Investments and interest-bearing deposits	$	27,804	$	25,607	$	27,228	$	2,197			9	%	$	576			2	%
Loans and leases
Commercial loans and leases		49,557		47,972		45,068		1,585			3			4,489			10
Retail loans		53,994		53,019		51,470		975			2			2,524			5
Total loans and leases		103,551		100,991		96,538		2,560			3			7,013			7
Loans held for sale, at fair value		478		365		397		113			31			81			20
Other loans held for sale		372		386		300		(14	)		(4	)		72			24
Total loans and leases and loans held for sale		104,401		101,742		97,235		2,659			3			7,166			7
Total period-end interest-earning assets	$	132,205	$	127,349	$	124,463	$	4,856			4	%	$	7,742			6	%
Average interest-earning assets
Investments and interest-bearing deposits	$	26,007	$	25,548	$	27,145	$	459			2	%	$	(1,138	)		(4	)%
Loans and leases
Commercial loans and leases		49,134		47,043		44,696		2,091			4			4,438			10
Retail loans		53,543		53,219		50,910		324			1			2,633			5
Total loans and leases		102,677		100,262		95,606		2,415			2			7,071			7
Loans held for sale, at fair value		368		306		308		62			20			60			19
Other loans held for sale		440		49		146		391			NM			294			201
Total loans and leases and loans held for sale		103,485		100,617		96,060		2,868			3			7,425			8
Total average interest-earning assets	$	129,492	$	126,165	$	123,205	$	3,327			3	%	$	6,287			5	%

Investments and interest-bearing deposits of $27.8 billion as of June 30, 2016 increased $2.2 billion, or 9%, from March 31, 2016, largely reflecting an increase in investments, mainly cash, which were managed temporarily higher in connection with Brexit. Compared with June 30, 2015, investments and interest-bearing deposits increased $576 million, or 2%, reflecting the impact of our Brexit planning, partially offset by modest third quarter 2015 balance sheet deleveraging. At the end of second quarter 2016, the average effective duration of the securities portfolio decreased to 2.4 years, compared with 2.9 years at March 31, 2016 and 3.7 years at June 30, 2015, largely reflecting continued declines in longer-term interest rates, which increased estimated prepayment speeds.

Period-end loans and leases of $103.6 billion at June 30, 2016 increased $2.6 billion from $101.0 billion at March 31, 2016 and increased $7.0 billion from $96.5 billion at June 30, 2015. The linked-quarter change was driven by a $1.6 billion increase in

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Citizens Financial Group, Inc.

commercial loans and leases and a $975 million increase in retail loans. Compared with June 30, 2015, period-end loans and leases increased $7.0 billion, reflecting a $4.5 billion increase in commercial loans and leases and a $2.5 billion increase in retail loans.

Average loans and leases of $102.7 billion increased $2.4 billion from first quarter 2016, driven by a $2.1 billion increase in commercial and $324 million increase in retail loans. Commercial loan and lease growth reflects strength in Mid-corporate and Industry Verticals, Commercial Real Estate, Corporate Finance and Franchise Finance. Retail loan growth was primarily driven by student, other unsecured retail loans and mortgage, partially offset by lower home equity outstandings, including continued runoff in the non-core portfolio.

Compared with second quarter 2015, average loans and leases increased $7.1 billion, or 7%, reflecting a $4.4 billion increase in commercial and a $2.6 billion increase in retail. Commercial loan growth was driven by strength in Commercial Real Estate, Mid-corporate and Industry Verticals, Corporate Finance and Franchise Finance, partially offset by lower Middle Market loan balances. Retail loan growth was driven by strength in student, residential mortgages, auto and other unsecured retail loans, partially offset by lower home equity balances.

Deposits							2Q16 change from
($s in millions)	2Q16		1Q16		2Q15		1Q16						2Q15
							$			%			$			%
Period-end deposits
Demand deposits	$	27,108	$	27,186	$	26,678	$	(78	)		—	%	$	430			2	%
Checking with interest		19,838		18,706		17,114		1,132			6			2,724			16
Savings		8,841		8,748		8,080		93			1			761			9
Money market accounts		37,503		35,513		35,735		1,990			6			1,768			5
Term deposits		12,967		12,453		13,008		514			4			(41	)		—
Total period-end deposits	$	106,257	$	102,606	$	100,615	$	3,651			4	%	$	5,642			6	%
Average deposits
Demand deposits	$	27,448	$	27,170	$	26,419	$	278			1	%	$	1,029			4	%
Checking with interest		19,003		17,993		16,561		1,010			6			2,442			15
Savings		8,762		8,394		8,076		368			4			686			8
Money market accounts		36,187		36,225		34,901		(38	)		—			1,286			4
Term deposits		12,581		12,199		12,576		382			3			5			—
Total average deposits	$	103,981	$	101,981	$	98,533	$	2,000			2	%	$	5,448			6	%

Period-end total deposits at June 30, 2016 of $106.3 billion increased $3.7 billion from March 31, 2016 as growth in money market, checking with interest and term deposits was partially offset by a decrease in demand deposits. Compared with June 30, 2015, period-end total deposits increased $5.6 billion, or 6%, driven by growth in checking with interest, money market, savings and demand deposits, partially offset by a reduction in term deposits.

Second quarter 2016 average deposits of $104.0 billion increased $2.0 billion from first quarter 2016, driven by growth in checking with interest, term deposits, savings and demand deposits. Compared with second quarter 2015, average deposits increased $5.4 billion driven by growth in checking with interest, money market, savings and demand deposits.

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Citizens Financial Group, Inc.

Borrowed funds							2Q16 change from
($s in millions)	2Q16		1Q16		2Q15		1Q16						2Q15
							$			%			$			%
Period-end borrowed funds
Federal funds purchased and securities sold under agreements to repurchase	$	717	$	714	$	3,784	$	3			—	%	$	(3,067	)		(81	)%
Other short-term borrowed funds		2,770		3,300		6,762		(530	)		(16	)		(3,992	)		(59	)
Long-term borrowed funds		11,810		10,035		3,890		1,775			18			7,920			204
Total borrowed funds	$	15,297	$	14,049	$	14,436	$	1,248			9	%	$	861			6	%
Average borrowed funds	$	15,038	$	13,873	$	14,772	$	1,165			8	%	$	266			2	%

Total borrowed funds of $15.3 billion at June 30, 2016 increased $1.2 billion from March 31, 2016, largely reflecting the issuance of $1.0 billion of senior unsecured bank debt and shift from short-term to long-term Federal Home Loan Bank (“FHLB”) advances. Compared with June 30, 2015, total borrowed funds increased $861 million, largely reflecting the issuance of senior unsecured bank debt and an increase in long-term FHLB advances, which more than offset continued reductions in our reliance on short-term borrowings.

Average borrowed funds of $15.0 billion increased $1.2 billion from first quarter 2016 and $266 million from second quarter 2015. On May 13, 2016, we issued $1.0 billion in five-year 2.550% senior unsecured bank notes.

Capital(1)										2Q16 change from
($s and shares in millions)	2Q16			1Q16			2Q15			1Q16						2Q15
										$			%			$			%
Period-end capital
Stockholders’ equity	$	20,226		$	19,965		$	19,586		$	261			1	%	$	640			3	%
Stockholders’ common equity		19,979			19,718			19,339			261			1			640			3
Tangible common equity*		13,608			13,333			12,909			275			2			699			5
Tangible common equity per share*	$	25.72		$	25.21		$	24.03		$	0.51			2			1.69			7
Common shares - at end of period		529.1			528.9			537.1			0.2			—			(8.1	)		(1	)
Common shares - average (diluted)		530.4			530.4			539.9			(0.1	)		—	%		(9.5	)		(2	)%
Common equity tier 1 capital ratio(1)(2)		11.5	%		11.6	%		11.8	%
Total capital ratio(1)(2)		14.9			15.1			15.3
Tier 1 leverage ratio(1)(2)		10.3	%		10.4	%		10.4	%

¹  Current reporting-period regulatory capital ratios are preliminary.

²  Basel III ratios assume that certain definitions impacting qualifying Basel III capital will phase in through 2019. Ratios also reflect the required U.S. Standardized methodology for calculating RWAs, effective January 1, 2015.

On June 30, 2016, our Basel III capital ratios on a transitional basis remained well in excess of applicable regulatory requirements, with a CET1 capital ratio of 11.5% and a total capital ratio of 14.9%. Our capital ratios continue to reflect progress against our objective of realigning our capital profile to be more consistent with that of peer regional banks, while maintaining a strong capital base to support our growth aspirations, strategy and risk appetite. The second quarter 2016 dividend per common share increased 20% to $0.12 from $0.10 in first quarter 2016.

On June 29, 2016, Citizens announced that the Federal Reserve had no objection to its 2016 Capital Plan (the “Plan”) submitted in connection with the Federal Reserve’s 2016 Comprehensive Capital Analysis and Review. The Plan includes the repurchase of up to $690 million of Citizens’ outstanding common stock beginning in third quarter 2016 through second quarter 2017. The

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Citizens Financial Group, Inc.

Plan also provides for proposed quarterly dividends of $0.12 per share through the end of 2016 and the potential to raise the quarterly dividend to $0.14 per share in 2017. Proposed capital actions are subject to consideration and approval by CFG’s Board of Directors.

Credit quality review										2Q16 change from
($s in millions)	2Q16			1Q16			2Q15			1Q16						2Q15
										$			%			$			%
Nonperforming loans and leases	$	1,044		$	1,079		$	1,050		$	(35	)		(3	)%	$	(6	)		(1	)%
Net charge-offs		65			83			78			(18	)		(22	)		(13	)		(17	)
Provision for credit losses		90			91			77			(1	)		(1	)		13			17
Allowance for loan and lease losses	$	1,246		$	1,224		$	1,201		$	22			2	%	$	45			4	%
Total nonperforming loans and leases as a % of total loans and leases		1.01	%		1.07	%		1.09	%		(6	) bps					(8	) bps
Net charge-offs as % of total loans and leases		0.25			0.33			0.33			(8	) bps					(8	) bps
Allowance for loan and lease losses as a % of nonperforming loans and leases		119.3	%		113.4	%		114.4	%		584	bps					490	bps

Credit quality metrics improved during the quarter, reflecting a reduction in net charge-offs and improving commercial and retail credit quality. Nonperforming loans and leases of $1.0 billion at June 30, 2016 decreased $35 million from March 31, 2016, reflecting improvement in commercial and retail categories. The nonperforming loans and leases to total loans and leases ratio of 1.01% at June 30, 2016 improved 6 basis points from 1.07% at March 31, 2016 and 8 basis points from 1.09% at June 30, 2015. Compared with second quarter 2015, nonperforming loans and leases decreased $6 million.

Net charge-offs of $65 million, or 25 basis points, of total average loans and leases in second quarter 2016 decreased $18 million from $83 million, or 33 basis points, in first quarter 2016. Retail product net charge-offs of $63 million were $11 million lower than first quarter 2016 levels. Commercial net charge-offs were $2 million in second quarter 2016 compared with commercial net charge-offs of $9 million in first quarter 2016.

Allowance for loan and lease losses of $1.2 billion increased $22 million, or 2%, versus first quarter 2016 and $45 million, or 4%, from second quarter 2015, largely reflecting continued loan growth.

Allowance for loan and lease losses to total loans and leases was 1.20% as of June 30, 2016, relatively stable compared with 1.21% as of March 31, 2016 and 1.24% as of June 30, 2015. The allowance for loan and lease losses to nonperforming loans and leases ratio increased to 119% as of June 30, 2016 from 113% as of March 31, 2016 and 114% as of June 30, 2015.

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Citizens Financial Group, Inc.

Additional Segment Detail:

Consumer Banking Segment										2Q16 change from
($s in millions)	2Q16			1Q16			2Q15			1Q16						2Q15
										$			%			$			%
Net interest income	$	602		$	581		$	544		$	21			4	%	$	58			11	%
Noninterest income		219			208			230			11			5			(11	)		(5	)
Total revenue		821			789			774			32			4			47			6
Noninterest expense		632			616			613			16			3			19			3
Pre-provision profit		189			173			161			16			9			28			17
Provision for credit losses		49			63			60			(14	)		(22	)		(11	)		(18	)
Income before income tax expense		140			110			101			30			27			39			39
Income tax expense		50			39			35			11			28			15			43
Net income	$	90		$	71		$	66		$	19			27	%	$	24			36	%
Average balances
Total loans and leases (1)	$	54,353		$	53,744		$	51,024		$	609			1	%	$	3,329			7	%
Total deposits		71,863			70,871			69,963			992			1	%		1,900			3	%
Key metrics
ROTCE (2)*		7.1	%		5.6	%		5.7	%		150	bps					143	bps
Efficiency ratio*		77	%		78	%		79	%		(110	) bps					(227	) bps
Loan-to-deposit ratio (period-end)(1)		76.1	%		74.7	%		73.2	%		131	bps					285	bps

¹ Includes held for sale.

² Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level of common equity tier 1 and then allocate that approximation to the segments based on economic capital.

Consumer Banking net income of $90 million in second quarter 2016 increased $19 million, or 27%, compared to first quarter 2016, reflecting a $32 million increase in total revenue and lower provision for credit losses, partially offset by higher noninterest expense. Net interest income increased $21 million, or 4%, from first quarter 2016, driven by a $538 million increase in average loans led by higher student and mortgage loan balances and improved loan and deposit spreads. Noninterest income increased $11 million, or 5%, from first quarter 2016, driven by higher mortgage banking fees, reflecting higher application and origination volumes and improved sale gains and spreads, as well as improved MSR valuations and higher service charges and fees. Results also reflect improved card fees and trust and investment services fees. Noninterest expense increased $16 million, or 3%, from first quarter 2016, reflecting higher salary and benefits expense related to timing of merit increases and incentive payments, higher regulatory, fraud and insurance costs and higher outside services expense. Provision for credit losses of $49 million decreased $14 million from first quarter 2016, driven by lower net charge-offs in auto and home equity.

Compared with second quarter 2015, net income increased $24 million, or 36%, as revenue growth and lower provision for credit losses was partially offset by an increase in noninterest expense. Net interest income increased $58 million, or 11%, driven by the benefit of a $3.3 billion increase in average loans, reflecting growth in student, mortgage, auto and consumer unsecured loans and improved deposit spreads. Noninterest income decreased $11 million, or 5%, as an increase in service charges and fees was more than offset by a reduction in card fees tied to the card reward accounting change. Results also reflect lower mortgage banking fees, which declined $5 million from second quarter 2015 levels, as the benefit of higher application volumes and sale gains and spreads was more than offset by a reduction in MSR valuations from higher first quarter

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2015 levels, reflecting the reduction in long-term rates. Noninterest expense increased $19 million, or 3%, driven by higher salaries and benefits largely related to a change in the timing of merit increases and incentive payments. Results also reflect an increase in outside services expense, largely offset by the card reward accounting change impact. Provision for credit losses declined $11 million from second quarter 2015, driven by lower net charge-offs in home equity.

Commercial Banking Segment										2Q16 change from
($s in millions)	2Q16			1Q16			2Q15			1Q16						2Q15
										$			%			$			%
Net interest income	$	314		$	300		$	286		$	14			5	%	$	28			10	%
Noninterest income		122			99			108			23			23			14			13
Total revenue		436			399			394			37			9			42			11
Noninterest expense		186			187			181			(1	)		(1	)		5			3
Pre-provision profit		250			212			213			38			18			37			17
Provision for credit losses		(1	)		9			7			(10	)		(111	)		(8	)		(114	)
Income before income tax expense		251			203			206			48			24			45			22
Income tax expense		87			70			71			17			24			16			23
Net income	$	164		$	133		$	135		$	31			23	%	$	29			21	%
Average balances
Total loans and leases (1)	$	46,073		$	43,899		$	41,467		$	2,174			5	%	$	4,606			11	%
Total deposits		25,113			24,833			22,717			280			1	%		2,396			11	%
Key metrics
ROTCE (2)*		13.0	%		11.2	%		11.7	%		185	bps					135	bps
Efficiency ratio*		43	%		47	%		46	%		(386	) bps					(319	) bps
Loan-to-deposit ratio (period-end)(1)		172.6	%		185.1	%		176.2	%		(1,249	) bps					(352	) bps

¹ Includes held for sale.

² Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level for common equity tier 1 and then allocate that approximation to the segments based on economic capital.

Commercial Banking net income of $164 million in second quarter 2016 increased $31 million, or 23%, from first quarter 2016, reflecting a $37 million increase in total revenues and lower provision expense. Net interest income of $314 million increased $14 million compared to first quarter 2016, driven by loan growth and higher interest recoveries. Average loans and leases increased $2.1 billion led by Mid-corporate and Industry Verticals, Corporate Finance and Commercial Real Estate. Noninterest income increased $23 million, driven by strength in capital markets and interest rate products. Noninterest expense was flat as higher salaries and employee benefits, which included a change in timing of merit and incentive payments, and higher insurance costs were offset by lower outside services expense. Provision for credit losses decreased $10 million from first quarter levels, reflecting lower net charge-offs.

Compared to second quarter 2015, net income increased $29 million, or 21%, as a $42 million increase in total revenue and loan recoveries was partially offset by a $5 million increase in noninterest expense. Net interest income increased $28 million, or 10%, from second quarter 2015, reflecting the benefit of a $4.6 billion increase in average loans and leases, improved deposit spreads and a $2.4 billion increase in average deposits. Average loan and lease growth was driven by strength in Commercial Real Estate, Mid-corporate and Industry Verticals, Corporate Finance and Franchise Finance. Noninterest income increased $14 million from second quarter 2015 levels, reflecting strength in service charges and fees, interest rate products

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Citizens Financial Group, Inc.

and capital markets fees. Noninterest expense increased $5 million from second quarter 2015 as increased salaries and employee benefits related to the timing of merit increases and incentive payments and higher insurance costs were partially offset by lower outside services. Provision for credit losses decreased $8 million from second quarter 2015 levels, reflecting lower charge-offs.

Other(1)									2Q16 change from
($s in millions)	2Q16			1Q16		2Q15			1Q16						2Q15
									$			%			$			%
Net interest income	$	7		$	23	$	10		$	(16	)		(70	)%	$	(3	)		(30	)%
Noninterest income		14			23		22			(9	)		(39	)		(8	)		(36	)
Total revenue		21			46		32			(25	)		(54	)		(11	)		(34	)
Noninterest expense		9			8		47			1			13			(38	)		(81	)
Pre-provision profit (loss)		12			38		(15	)		(26	)		(68	)		27			180
Provision for credit losses		42			19		10			23			121			32			NM
Income (loss) before income tax expense (benefit)		(30	)		19		(25	)		(49	)		NM			(5	)		(20	)
Income tax expense (benefit)		(19	)		—		(14	)		(19	)		NM			(5	)		(36	)
Net income (loss)	$	(11	)	$	19	$	(11	)	$	(30	)		(158	)%	$	—			—	%
Average balances
Total loans and leases (2)	$	3,059		$	2,974	$	3,569		$	85			3	%	$	(510	)		(14	)%
Total deposits		7,005			6,277		5,853			728			12	%		1,152			20	%

¹  Includes the financial impact of non-core, liquidating loan portfolios and other non-core assets, our treasury activities, wholesale funding activities, securities portfolio, community development assets and other unallocated assets, liabilities, revenues, provision for credit losses and expenses not attributed to our Consumer Banking or Commercial Banking segments.

²  Includes held for sale.

Other recorded a net loss of $11 million in second quarter 2016 compared to net income of $19 million in first quarter 2016. This decrease was largely driven by higher provision for credit losses, which included a $25 million reserve build and higher non-core net charge-offs. Net interest income of $7 million decreased $16 million from first quarter 2016, largely reflecting higher borrowing costs related to term-debt issuance, lower residual funds transfer pricing, investment portfolio income and non-core loan interest. Noninterest income of $14 million decreased $9 million from first quarter 2016, largely reflecting lower securities gains and higher OTTI charges. Noninterest expense remained relatively stable. Provision for credit losses of $42 million in second quarter 2016 included a $25 million reserve build, compared with $19 million of provision for credit losses in first quarter 2016, which included an $8 million reserve build. Provision for credit losses within Other mainly represents the residual change in the consolidated allowance for credit losses after attributing the respective net charge-offs to the Consumer Banking and Commercial Banking segments, while also factoring in net charge-offs related to the non-core portfolio.

Other net loss in second quarter 2016 was flat with second quarter 2015, reflecting the lack of restructuring charges and special items, offset by lower revenue and an increase in provision for credit losses, which reflects a $25 million reserve build compared to a $1 million reserve release in second quarter 2015.

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Corresponding Financial Tables and Information

Investors are encouraged to review the foregoing summary and discussion of Citizens’ earnings and financial condition in conjunction with the detailed financial tables and other information available on the Investor Relations portion of the company’s website at www.citizensbank.com/about-us.

Media:	Jim Hughes - 781.751.5404
Investors:	Ellen A. Taylor - 203.900.6854

Conference Call

CFG management will host a live conference call today with details as follows:

Time:	8:30 am ET
Dial-in:	(800) 230 1085, conference ID 393238

Webcast/Presentation: The live webcast will be available at http://investor.citizensbank.com under Events & Presentations

Replay Information: A replay of the conference call will be available beginning at 10:30 am ET on July 21 through August 21, 2016. Please dial (800) 475-6701 and enter access code 393238. The webcast replay will be available at http://investor.citizensbank.com under Events & Presentations

About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $145.2 billion in assets as of June 30, 2016. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. In Consumer Banking, Citizens helps its retail customers “bank better” with mobile and online banking, a 24/7 customer contact center and the convenience of approximately 3,200 ATMs and approximately 1,200 Citizens Bank branches in 11 states in the New England, Mid-Atlantic and Midwest regions.

Citizens also provides mortgage lending, auto lending, student lending and commercial banking services in select markets nationwide. In Commercial Banking, Citizens offers corporate, institutional and not-for-profit clients a full range of wholesale banking products and services including lending and deposits, capital markets, treasury services, foreign exchange and interest hedging, leasing and asset finance, specialty finance and trade finance.

Citizens operates through its subsidiaries Citizens Bank, N.A. and Citizens Bank of Pennsylvania. Additional information about Citizens and its full line of products and services can be found at www.citizensbank.com.

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Citizens Financial Group, Inc.

Non-GAAP Financial Measures

This document contains non-GAAP financial measures. The table below presents reconciliations of certain non-GAAP measures. These reconciliations exclude restructuring charges and/or special items, which are included, where applicable, in the financial results presented in accordance with GAAP. Restructuring charges and special items include expenses related to our efforts to improve processes and enhance efficiencies, as well as rebranding, separation from RBS and regulatory expenses.

The non-GAAP measures presented below include “noninterest income”, “total revenue”, “ noninterest expense”, “pre-provision profit”, “income before income tax expense”, “income tax expense”, “net income”, “net income available to common stockholders”, “salaries and employee benefits”, “outside services”, “occupancy”, “equipment expense”, “other operating expense”, “net income per average common share”, “return on average common equity” and “return on average total assets”.” In addition, we present computations for “tangible book value per common share”, “return on average tangible common equity”, “return on average total tangible assets”, “efficiency ratio”, “pro forma Basel III fully phased-in common equity tier 1 capital”, “operating leverage”, “noninterest income before accounting change” and “card fee income before accounting change” as part of our non-GAAP measures.

We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe restructuring charges and special items in any period do not reflect the operational performance of the business in that period and, accordingly, it is useful to consider these line items with and without restructuring charges and special items. We believe this presentation also increases comparability of period-to-period results.

We also consider pro forma capital ratios defined by banking regulators but not effective at each period end to be non-GAAP financial measures. Since analysts and banking regulators may assess our capital adequacy using these pro forma ratios, we believe they are useful to provide investors the ability to assess our capital adequacy on the same basis.

Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for our results as reported under GAAP.

18

Citizens Financial Group, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(Excluding restructuring charges and special items)

($s in millions, except per share data)

		QUARTERLY TRENDS															FOR THE SIX MONTHS ENDED JUNE 30,						FOR THE YEAR ENDED DECEMBER 30,
		2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015			2015		2014
Noninterest income, excluding special items:
Noninterest income (GAAP)		$	355		$	330		$	362		$	353		$	360		$	685		$	707
Less: Special items			—			—			—			—			—			—			—
Noninterest income, excluding special items (non-GAAP)		$	355		$	330		$	362		$	353		$	360		$	685		$	707
Total revenue, excluding special items:
Total revenue (GAAP)	A	$	1,278		$	1,234		$	1,232		$	1,209		$	1,200		$	2,512		$	2,383		$	4,824	$	4,979
Less: Special items			—			—			—			—			—			—			—			—		288
Total revenue, excluding special items (non-GAAP)	B	$	1,278		$	1,234		$	1,232		$	1,209		$	1,200		$	2,512		$	2,383		$	4,824	$	4,691
Noninterest expense, excluding restructuring charges and special items:
Noninterest expense (GAAP)	C	$	827		$	811		$	810		$	798		$	841		$	1,638		$	1,651		$	3,259	$	3,392
Less: Restructuring charges and special items			—			—			—			—			40			—			50			50		169
Noninterest expense, excluding restructuring charges and special items (non-GAAP)	D	$	827		$	811		$	810		$	798		$	801		$	1,638		$	1,601		$	3,209	$	3,223
Pre-provision profit, excluding restructuring charges and special items:
Total revenue, excluding restructuring charges and special items (non-GAAP)		$	1,278		$	1,234		$	1,232		$	1,209		$	1,200		$	2,512		$	2,383
Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)			827			811			810			798			801			1,638			1,601
Pre-provision profit, excluding restructuring charges and special items (non-GAAP)		$	451		$	423		$	422		$	411		$	399		$	874		$	782
Income before income tax expense, excluding restructuring charges and special items:
Income before income tax expense (GAAP)		$	361		$	332		$	331		$	335		$	282		$	693		$	597
Less: Income before income tax expense (benefit) related to restructuring charges and special items (GAAP)			—			—			—			—			(40	)		—			(50	)
Income before income tax expense, excluding restructuring charges and special items (non-GAAP)		$	361		$	332		$	331		$	335		$	322		$	693		$	647
Income tax expense, excluding restructuring charges and special items:
Income tax expense (GAAP)		$	118		$	109		$	110		$	115		$	92		$	227		$	198
Less: Income tax (benefit) related to restructuring charges and special items (GAAP)			—			—			—			—			(15	)		—			(19	)
Income tax expense, excluding restructuring charges and special items (non-GAAP)		$	118		$	109		$	110		$	115		$	107		$	227		$	217
Net income, excluding restructuring charges and special items:
Net income (GAAP)	E	$	243		$	223		$	221		$	220		$	190		$	466		$	399
Add: Restructuring charges and special items, net of income tax expense (benefit)			—			—			—			—			25			—			31
Net income, excluding restructuring charges and special items (non-GAAP)	F	$	243		$	223		$	221		$	220		$	215		$	466		$	430
Net income available to common stockholders (GAAP), excluding restructuring charges and special items:
Net income available to common stockholders (GAAP)	G	$	243		$	216		$	221		$	213		$	190		$	459		$	399
Add: Restructuring charges and special items, net of income tax expense (benefit)			—			—			—			—			25			—			31
Net income available to common stockholders, excluding restructuring charges and special items (non-GAAP)	H	$	243		$	216		$	221		$	213		$	215		$	459		$	430
Return on average common equity, excluding restructuring charges and special items:
Average common equity (GAAP)	I	$	19,768		$	19,567		$	19,359		$	19,261		$	19,391		$	19,667		$	19,399
Return on average common equity, excluding restructuring charges and special items (non-GAAP)	H/I		4.94	%		4.45	%		4.51	%		4.40	%		4.45	%		4.70	%		4.47	%
Return on average tangible common equity and return on average tangible common equity, excluding restructuring charges and special items:
Average common equity (GAAP)	I	$	19,768		$	19,567		$	19,359		$	19,261		$	19,391		$	19,667		$	19,399
Less: Average goodwill (GAAP)			6,876			6,876			6,876			6,876			6,876			6,876			6,876
Less: Average other intangibles (GAAP)			2			3			3			4			5			2			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			496			481			468			453			437			488			430
Average tangible common equity (non-GAAP)	J	$	13,386		$	13,169		$	12,948		$	12,834		$	12,947		$	13,277		$	12,948
Return on average tangible common equity (non-GAAP)	G/J		7.30	%		6.61	%		6.75	%		6.60	%		5.90	%		6.96	%		6.21	%
Return on average tangible common equity, excluding restructuring charges and special items (non-GAAP)	H/J		7.30	%		6.61	%		6.75	%		6.60	%		6.67	%		6.96	%		6.70	%

19

Citizens Financial Group, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(Excluding restructuring charges and special items)

($s in millions, except per share data)

		QUARTERLY TRENDS															FOR THE SIX MONTHS ENDED JUNE 30,						FOR THE YEAR ENDED DECEMBER 30,
		2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015			2015			2014
Return on average total assets, excluding restructuring charges and special items:
Average total assets (GAAP)	K	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	140,479		$	134,429
Return on average total assets, excluding restructuring charges and special items (non-GAAP)	F/K		0.69	%		0.65	%		0.64	%		0.65	%		0.64	%		0.67	%		0.65	%
Return on average total tangible assets and return on average total tangible assets, excluding restructuring charges and special items:
Average total assets (GAAP)	K	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	140,479		$	134,429
Less: Average goodwill (GAAP)			6,876			6,876			6,876			6,876			6,876			6,876			6,876
Less: Average other intangibles (GAAP)			2			3			3			4			5			2			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			496			481			468			453			437			488			430
Average tangible assets (non-GAAP)	L	$	135,797		$	132,382		$	129,887		$	128,676		$	129,077		$	134,089		$	127,978
Return on average total tangible assets (non-GAAP)	E/L		0.72	%		0.68	%		0.67	%		0.68	%		0.59	%		0.70	%		0.63	%
Return on average total tangible assets, excluding restructuring charges and special items (non-GAAP)	F/L		0.72	%		0.68	%		0.67	%		0.68	%		0.67	%		0.70	%		0.68	%
Efficiency ratio and efficiency ratio, excluding restructuring charges and special items:
Efficiency ratio (non-GAAP)	C/A		64.71	%		65.66	%		65.76	%		66.02	%		70.02	%		65.18	%		69.27	%		67.56	%		68.12	%
Efficiency ratio, excluding restructuring charges and special items (non-GAAP)	D/B		64.71	%		65.66	%		65.76	%		66.02	%		66.70	%		65.18	%		67.17	%		66.52	%		68.70	%
Tangible book value per common share:
Common shares - at end of period (GAAP)	M		529,094,976			528,933,727			527,774,428			527,636,510			537,149,717			529,094,976			537,149,717
Common stockholders’ equity (GAAP)		$	19,979		$	19,718		$	19,399		$	19,353		$	19,339		$	19,979		$	19,339
Less: Goodwill (GAAP)			6,876			6,876			6,876			6,876			6,876			6,876			6,876
Less: Other intangible assets (GAAP)			2			3			3			3			4			2			4
Add: Deferred tax liabilities related to goodwill (GAAP)			507			494			480			465			450			507			450
Tangible common equity (non-GAAP)	N	$	13,608		$	13,333		$	13,000		$	12,939		$	12,909		$	13,608		$	12,909
Tangible book value per common share (non-GAAP)	N/M	$	25.72		$	25.21		$	24.63		$	24.52		$	24.03		$	25.72		$	24.03
Net income per average common share - basic and diluted, excluding restructuring charges and special items:
Average common shares outstanding - basic (GAAP)	O		528,968,330			528,070,648			527,648,630			530,985,255			537,729,248			528,519,489			541,986,653
Average common shares outstanding - diluted (GAAP)	P		530,365,203			530,446,188			530,275,673			533,398,158			539,909,366			530,396,871			544,804,268
Net income available to common stockholders (GAAP)	G	$	243		$	216		$	221		$	213		$	190		$	459		$	399
Net income per average common share - basic (GAAP)	G/O		0.46			0.41			0.42			0.40			0.35			0.87			0.74
Net income per average common share - diluted (GAAP)	G/P		0.46			0.41			0.42			0.40			0.35			0.87			0.73
Net income available to common stockholders, excluding restructuring charges and special items (non-GAAP)	H		243			216			221			213			215			459			430
Net income per average common share - basic, excluding restructuring charges and special items (non-GAAP)	H/O		0.46			0.41			0.42			0.40			0.40			0.87			0.79
Net income per average common share - diluted, excluding restructuring charges and special items (non-GAAP)	H/P		0.46			0.41			0.42			0.40			0.40			0.87			0.79

20

Citizens Financial Group, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(Excluding restructuring charges and special items)

($s in millions)

		QUARTERLY TRENDS															FOR THE SIX MONTHS ENDED JUNE 30,
		2Q16			1Q16			4Q15			3Q15			2Q15			2016			2015
Pro forma Basel III fully phased-in common equity tier 1 capital ratio1:
Common equity tier 1 (regulatory)		$	13,768		$	13,570		$	13,389		$	13,200		$	13,270
Less: Change in DTA and other threshold deductions (GAAP)			1			1			2			2			3
Pro forma Basel III fully phased-in common equity tier 1 (non-GAAP)	Q	$	13,767		$	13,569		$	13,387		$	13,198		$	13,267
Risk-weighted assets (regulatory general risk weight approach)		$	119,492		$	116,591		$	114,084		$	112,277		$	112,131
Add: Net change in credit and other risk-weighted assets (regulatory)			228			232			244			243			247
Basel III standardized approach risk-weighted assets (non-GAAP)	R	$	119,720		$	116,823		$	114,328		$	112,520		$	112,378
Pro forma Basel III fully phased-in common equity tier 1 capital ratio (non-GAAP)1	Q/R		11.5	%		11.6	%		11.7	%		11.7	%		11.8	%
Salaries and employee benefits, excluding restructuring charges and special items:
Salaries and employee benefits (GAAP)		$	432		$	425		$	402		$	404		$	411		$	857		$	830
Less: Restructuring charges and special items			—			—			(2	)		—			6			—			5
Salaries and employee benefits, excluding restructuring charges and special items (non-GAAP)		$	432		$	425		$	404		$	404		$	405		$	857		$	825
Outside services, excluding restructuring charges and special items:
Outside services (GAAP)		$	86		$	91		$	104		$	89		$	99		$	177		$	178
Less: Restructuring charges and special items			—			—			2			—			16			—			24
Outside services, excluding restructuring charges and special items (non-GAAP)		$	86		$	91		$	102		$	89		$	83		$	177		$	154
Occupancy, excluding restructuring charges and special items:
Occupancy (GAAP)		$	76		$	76		$	74		$	75		$	90		$	152		$	170
Less: Restructuring charges and special items			—			—			—			—			15			—			17
Occupancy, excluding restructuring charges and special items (non-GAAP)		$	76		$	76		$	74		$	75		$	75		$	152		$	153
Equipment expense, excluding restructuring charges and special items:
Equipment expense (GAAP)		$	64		$	65		$	67		$	62		$	65		$	129		$	128
Less: Restructuring charges and special items			—			—			—			—			—			—			1
Equipment expense, excluding restructuring charges and special items (non-GAAP)		$	64		$	65		$	67		$	62		$	65		$	129		$	127
Other operating expense, excluding restructuring charges and special items:
Other operating expense (GAAP)		$	128		$	115		$	125		$	133		$	139		$	243		$	272
Less: Restructuring charges and special items			—			—			—			—			3			—			3
Other operating expense, excluding restructuring charges and special items (non-GAAP)		$	128		$	115		$	125		$	133		$	136		$	243		$	269
Restructuring charges and special expense items include:
Restructuring charges		$	0		$	0		$	0		$	0		$	25		$	0		$	26
Special items			—			—			—			—			15			—			24
Restructuring charges and special expense items before income tax expense		$	0		$	0		$	0		$	0		$	40		$	0		$	50
1)     Basel III ratios assume certain definitions impacting qualifying Basel III capital, which otherwise will phase in through 2019, are fully phased-in. Ratios also reflect the required US Standardized methodology for calculating RWAs, effective January 1, 2015.
																	2Q16 vs 1Q16			2Q16 vs 2Q15
																	$ Change			$ Change
Noninterest income:
Noninterest income (GAAP)		$	355											$	360		($	5	)		(1	)%
Add: Reward accounting change			10												—			10			NM
Noninterest income, before accounting change (non-GAAP)		$	365											$	360		$	5			1	%

21

Citizens Financial Group, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(Excluding restructuring charges and special items)

($s in millions, except per share data)

		QUARTERLY TRENDS										FOR THE SIX MONTHS ENDED JUNE 30,						2Q16 vs 1Q16			2Q16 vs 2Q15
		2Q16		1Q16		4Q15		3Q15		2Q15		2016			2015			% Change			% Change
Operating leverage:
Total revenue (GAAP)	A	$	1,278	$	1,234					$	1,200	$	2,512		$	2,383			3.6	%		6.5	%
Noninterest expense (GAAP)	C	$	827	$	811					$	841	$	1,638		$	1,651			2.0	%		(1.7	)%
Operating leverage (non-GAAP)																			1.6	%		8.2	%
Operating leverage, excluding restructuring charges and special items:
Total revenue, excluding restructuring charges and special items (non-GAAP)	B	$	1,278	$	1,234					$	1,200	$	2,512		$	2,383			3.6	%		6.5	%
Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)	D	$	827	$	811					$	801	$	1,638		$	1,601			2.0	%		3.2	%
Operating leverage, excluding restructuring charges and special items: (non-GAAP)																			1.6	%		3.3	%
		HALF YEAR TRENDS										1H16 vs 1H15			2H15 vs 2H14			1H15 vs 1H14
		1H14		2H14		1H15		2H15		1H16		% Change			% Change			% Change
Operating leverage:
Total revenue (GAAP)		$	2,639	$	2,340	$	2,383	$	2,441	$	2,512		5.4	%		4.3	%		(9.7	)%
Noninterest expense (GAAP)		$	1,758	$	1,634	$	1,651	$	1,608	$	1,638		(0.8	)%		(1.6	)%		(6.1	)%
Operating leverage (non-GAAP)													6.2	%		5.9	%		(3.6	)%
Operating leverage, excluding restructuring charges and special items:
Total revenue, excluding restructuring charges and special items (non-GAAP)		$	2,351	$	2,340	$	2,383	$	2,441	$	2,512		5.4	%		4.3	%		1.4	%
Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)		$	1,643	$	1,579	$	1,601	$	1,608	$	1,638		2.3	%		1.8	%		(2.6	)%
Operating leverage, excluding restructuring charges and special items: (non-GAAP)													3.1	%		2.5	%		3.9	%

22

Citizens Financial Group, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS

(dollars in millions)

		THREE MONTHS ENDED JUNE 30,												THREE MONTHS ENDED MARCH 31,
		2016												2016
		Consumer Banking			Commercial Banking			Other			Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated
Net income available to common stockholders:
Net income (loss) (GAAP)	A	$	90		$	164		($	11	)	$	243		$	71		$	133		$	19	$	223
Less: Preferred stock dividends			—			—			—			—			—			—			7		7
Net income available to common stockholders	B	$	90		$	164		($	11	)	$	243		$	71		$	133		$	12	$	216
Return on average tangible common equity:
Average common equity (GAAP)		$	5,110		$	5,040		$	9,618		$	19,768		$	5,089		$	4,790		$	9,688	$	19,567
Less: Average goodwill (GAAP)			—			—			6,876			6,876			—			—			6,876		6,876
Average other intangibles (GAAP)			—			—			2			2			—			—			3		3
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			496			496			—			—			481		481
Average tangible common equity (non-GAAP)	C	$	5,110		$	5,040		$	3,236		$	13,386		$	5,089		$	4,790		$	3,290	$	13,169
Return on average tangible common equity (non-GAAP):	B/C		7.09	%		13.04	%		NM			7.30	%		5.59	%		11.19	%		NM		6.61	%
Return on average total tangible assets:
Average total assets (GAAP)		$	55,660		$	47,388		$	39,131		$	142,179		$	55,116		$	45,304		$	38,360	$	138,780
Less: Average goodwill (GAAP)			—			—			6,876			6,876			—			—			6,876		6,876
Average other intangibles (GAAP)			—			—			2			2			—			—			3		3
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			496			496			—			—			481		481
Average tangible assets (non-GAAP)	D	$	55,660		$	47,388		$	32,749		$	135,797		$	55,116		$	45,304		$	31,962	$	132,382
Return on average total tangible assets (non-GAAP)	A/D		0.65	%		1.39	%		NM			0.72	%		0.52	%		1.18	%		NM		0.68	%
Efficiency ratio:
Noninterest expense (GAAP)	E	$	632		$	186		$	9		$	827		$	616		$	187		$	8	$	811
Net interest income (GAAP)			602			314			7			923			581			300			23		904
Noninterest income (GAAP)			219			122			14			355			208			99			23		330
Total revenue	F	$	821		$	436		$	21		$	1,278		$	789		$	399		$	46	$	1,234
Efficiency ratio (non-GAAP)	E/F		76.98	%		42.88	%		NM			64.71	%		78.08	%		46.74	%		NM		65.66	%
		THREE MONTHS ENDED DECEMBER 31,												THREE MONTHS ENDED SEPTEMBER 30,
		2015												2015
		Consumer Banking			Commercial Banking			Other			Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated
Net income available to common stockholders:
Net income (loss) (GAAP)	A	$	67		$	152		$	2		$	221		$	68		$	145		$	7	$	220
Less: Preferred stock dividends			—			—			—			—			—			—			7		7
Net income available to common stockholders	B	$	67		$	152		$	2		$	221		$	68		$	145		$	—	$	213
Return on average tangible common equity:
Average common equity (GAAP)		$	4,831		$	4,787		$	9,741		$	19,359		$	4,791		$	4,722		$	9,748	$	19,261
Less: Average goodwill (GAAP)			—			—			6,876			6,876			—			—			6,876		6,876
Average other intangibles (GAAP)			—			—			3			3			—			—			4		4
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			468			468			—			—			453		453
Average tangible common equity (non-GAAP)	C	$	4,831		$	4,787		$	3,330		$	12,948		$	4,791		$	4,722		$	3,321	$	12,834
Return on average tangible common equity (non-GAAP):	B/C		5.50	%		12.57	%		NM			6.75	%		5.67	%		12.24	%		NM		6.60	%
Return on average total tangible assets:
Average total assets (GAAP)		$	54,065		$	43,835		$	38,398		$	136,298		$	53,206		$	43,113		$	38,784	$	135,103
Less: Average goodwill (GAAP)			—			—			6,876			6,876			—			—			6,876		6,876
Average other intangibles (GAAP)			—			—			3			3			—			—			4		4
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			468			468			—			—			453		453
Average tangible assets (non-GAAP)	D	$	54,065		$	43,835		$	31,987		$	129,887		$	53,206		$	43,113		$	32,357	$	128,676
Return on average total tangible assets (non-GAAP)	A/D		0.49	%		1.37	%		NM			0.67	%		0.51	%		1.34	%		NM		0.68	%
Efficiency ratio:
Noninterest expense (GAAP)	E	$	624		$	180		$	6		$	810		$	623		$	175		$	—	$	798
Net interest income (GAAP)			565			301			4			870			556			299			1		856
Noninterest income (GAAP)			226			107			29			362			235			100			18		353
Total revenue	F	$	791		$	408		$	33		$	1,232		$	791		$	399		$	19	$	1,209
Efficiency ratio (non-GAAP)	E/F		78.85	%		44.02	%		NM			65.76	%		78.72	%		43.75	%		NM		66.02	%
		THREE MONTHS ENDED JUNE 30,
		2015
		Consumer Banking			Commercial Banking			Other			Consolidated
Net income available to common stockholders:
Net income (loss) (GAAP)	A	$	66		$	135		($	11	)	$	190
Less: Preferred stock dividends			—			—			—			—
Net income available to common stockholders	B	$	66		$	135		($	11	)	$	190
Return on average tangible common equity:
Average common equity (GAAP)		$	4,681		$	4,625		$	10,085		$	19,391
Less: Average goodwill (GAAP)			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			437			437
Average tangible common equity (non-GAAP)	C	$	4,681		$	4,625		$	3,641		$	12,947
Return on average tangible common equity (non-GAAP):	B/C		5.66	%		11.69	%		NM			5.90	%
Return on average total tangible assets:
Average total assets (GAAP)		$	52,489		$	42,617		$	40,415		$	135,521
Less: Average goodwill (GAAP)			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			437			437
Average tangible assets (non-GAAP)	D	$	52,489		$	42,617		$	33,971		$	129,077
Return on average total tangible assets (non-GAAP)	A/D		0.51	%		1.27	%		NM			0.59	%
Efficiency ratio:
Noninterest expense (GAAP)	E	$	613		$	181		$	47		$	841
Net interest income (GAAP)			544			286			10			840
Noninterest income (GAAP)			230			108			22			360
Total revenue	F	$	774		$	394		$	32		$	1,200
Efficiency ratio (non-GAAP)	E/F		79.25	%		46.07	%		NM			70.02	%

23

Citizens Financial Group, Inc.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS

(dollars in millions)

		FOR SIX MONTHS ENDED JUNE 30,
		2016											2015
		Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other			Consolidated
Net income available to common stockholders:
Net income (loss) (GAAP)	A	$	161		$	297		$	8	$	466		$	127		$	282		($	10	)	$	399
Less: Preferred stock dividends			—			—			—		—			—			—			—			—
Net income available to common stockholders	B	$	161		$	297		$	8	$	466		$	127		$	282		($	10	)	$	399
Return on average tangible common equity:
Average common equity (GAAP)		$	5,099		$	4,915		$	9,653	$	19,667		$	4,665		$	4,576		$	10,158		$	19,399
Less: Average goodwill (GAAP)			—			—			6,876		6,876			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			2		2			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			488		488			—			—			430			430
Average tangible common equity (non-GAAP)	C	$	5,099		$	4,915		$	3,263	$	13,277		$	4,665		$	4,576		$	3,707		$	12,948
Return on average tangible common equity (non-GAAP)	B/C		6.34	%		12.14	%		NM		6.96	%		5.48	%		12.41	%		NM			6.21	%
Return on average total tangible assets:
Average total assets (GAAP)		$	55,388		$	46,346		$	38,745	$	140,479		$	52,048		$	42,114		$	40,267		$	134,429
Less: Average goodwill (GAAP)			—			—			6,876		6,876			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			2		2			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			488		488			—			—			430			430
Average tangible assets (non-GAAP)	D	$	55,388		$	46,346		$	32,355	$	134,089		$	52,048		$	42,114		$	33,816		$	127,978
Return on average total tangible assets (non-GAAP)	A/D		0.58	%		1.29	%		NM		0.70	%		0.49	%		1.35	%		NM			0.63	%
Efficiency ratio:
Noninterest expense (GAAP)	E	$	1,248		$	373		$	17	$	1,638		$	1,209		$	354		$	88		$	1,651
Net interest income (GAAP)			1,183			614			30		1,827			1,077			562			37			1,676
Noninterest income (GAAP)			427			221			37		685			449			208			50			707
Total revenue	F	$	1,610		$	835		$	67	$	2,512		$	1,526		$	770		$	87		$	2,383
Efficiency ratio (non-GAAP)	E/F		77.52	%		44.73	%		NM		65.18	%		79.25	%		46.04	%		NM			69.27	%

24

Citizens Financial Group, Inc.

Forward-Looking Statements

This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “goals,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.”

Forward-looking statements are based upon the current beliefs and expectations of management, and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ, materially, from those in the forward-looking statements include the following, without limitation:

• negative economic conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense;

• the rate of growth in the economy and employment levels, as well as general business and economic conditions;

• our ability to implement our strategic plan, including the cost savings and efficiency components, and achieve our indicative performance targets;

• our ability to remedy regulatory deficiencies and meet supervisory requirements and expectations;

• liabilities and business restrictions resulting from litigation and regulatory investigations;

• our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;

• the effect of the current low interest rate environment or changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale;

• changes in interest rates and market liquidity, as well as the magnitude of such changes, which may reduce interest margins, impact funding sources and affect the ability to originate and distribute financial products in the primary and secondary markets;

• the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;

• financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;

• a failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers, including as a result of cyber-attacks; and

• management’s ability to identify and manage these and other risks.

25

Citizens Financial Group, Inc.

In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or share repurchases will depend on our financial condition, earnings, cash needs, regulatory constraints, capital requirements (including requirements of our subsidiaries), and any other factors that our board of directors deems relevant in making such a determination. Therefore, there can be no assurance that we will pay any dividends to holders of our common stock, or as to the amount of any such dividends.

More information about factors that could cause actual results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the United States Securities and Exchange Commission on February 26, 2016.

Note: Percentage changes, per share amounts and ratios presented in this document are calculated using whole dollars.

CFG-IR

26

EX-99.2

2Q16 Financial Results

July 21, 2016

Exhibit 99.2

Forward-looking statements

2

This

document

contains

forward-looking

statements

within

the

Private

Securities

Litigation

Reform

Act

of

1995.

Any

statement

that

does

not

describe

historical

or

current

facts

is

a

forward-

looking

statement.

These

statements

often

include

the

words

“believes,”

“expects,”

“anticipates,”

“estimates,”

“intends,”

“plans,”

“goals,”

“targets,”

“initiatives,”

“potentially,”

“probably,”

“projects,”

“outlook”

or

similar

expressions

or

future

conditional

verbs

such

as

“may,”

“will,”

“should,”

“would,”

and

“could.”

Forward-looking

statements

are

based

upon

the

current

beliefs

and

expectations

of

management,

and

on

information

currently

available

to

management.

Our

statements

speak

as

of

the

date

hereof,

and

we

do

not

assume

any

obligation

to

update

these

statements

or

to

update

the

reasons

why

actual

results

could

differ

from

those

contained

in

such

statements

in

light

of

new

information

or

future

events.

We

caution

you,

therefore,

against

relying

on

any

of

these

forward-looking

statements.

They

are

neither

statements

of

historical

fact

nor

guarantees

or

assurances

of

future

performance.

While

there

is

no

assurance

that

any

list

of

risks

and

uncertainties

or

risk

factors

is

complete,

important

factors

that

could

cause

actual

results

to

differ

materially

from

those

in

the

forward-looking

statements

include

the

following,

without

limitation:

negative

economic

conditions

that

adversely

affect

the

general

economy,

housing

prices,

the

job

market,

consumer

confidence

and

spending

habits

which

may

affect,

among

other

things,

the

level

of

nonperforming

assets,

charge-offs

and

provision

expense;

the

rate

of

growth

in

the

economy

and

employment

levels,

as

well

as

general

business

and

economic

conditions;

our

ability

to

implement

our

strategic

plan,

including

the

cost

savings

and

efficiency

components,

and

achieve

our

indicative

performance

targets;

our

ability

to

remedy

regulatory

deficiencies

and

meet

supervisory

requirements

and

expectations;

liabilities

and

business

restrictions

resulting

from

litigation

and

regulatory

investigations;

our

capital

and

liquidity

requirements

(including

under

regulatory

capital

standards,

such

as

the

Basel

III

capital

standards)

and

our

ability

to

generate

capital

internally

or

raise

capital

on

favorable

terms;

the

effect

of

the

current

low

interest

rate

environment

or

changes

in

interest

rates

on

our

net

interest

income,

net

interest

margin

and

our

mortgage

originations,

mortgage

servicing

rights

and

mortgages

held

for

sale;

changes

in

interest

rates

and

market

liquidity,

as

well

as

the

magnitude

of

such

changes,

which

may

reduce

interest

margins,

impact

funding

sources

and

affect

the

ability

to

originate

and

distribute

financial

products

in

the

primary

and

secondary

markets;

the

effect

of

changes

in

the

level

of

checking

or

savings

account

deposits

on

our

funding

costs

and

net

interest

margin;

financial

services

reform

and

other

current,

pending

or

future

legislation

or

regulation

that

could

have

a

negative

effect

on

our

revenue

and

businesses,

including

the

Dodd-Frank

Act

and

other

legislation

and

regulation

relating

to

bank

products

and

services;

a

failure

in

or

breach

of

our

operational

or

security

systems

or

infrastructure,

or

those

of

our

third

party

vendors

or

other

service

providers,

including

as

a

result

of

cyber

attacks;

and

management’s

ability

to

identify

and

manage

these

and

other

risks.

In

addition

to

the

above

factors,

we

also

caution

that

the

amount

and

timing

of

any

future

common

stock

dividends

or

share

repurchases

will

depend

on

our

financial

condition,

earnings,

cash

needs,

regulatory

constraints,

capital

requirements

(including

requirements

of

our

subsidiaries),

and

any

other

factors

that

our

board

of

directors

deems

relevant

in

making

such

a

determination.

Therefore,

there

can

be

no

assurance

that

we

will

pay

any

dividends

to

holders

of

our

common

stock,

or

as

to

the

amount

of

any

such

dividends.

More

information

about

factors

that

could

cause

actual

results

to

differ

materially

from

those

described

in

the

forward-looking

statements

can

be

found

under

“Risk

Factors”

in

Part

I,

Item

1A

in

our

Annual

Report

on

Form

10-K

for

the

year

ended

December

31,

2015,

filed

with

the

United

States

Securities

and

Exchange

Commission

on

February

26,

2016.

Note:

Percentage

changes,

per

share

amounts

and

ratios

presented

in

this

document

are

calculated

using

whole

dollars.

Generated 7% YoY average loan growth, with strength in both commercial and retail

NII up 10% YoY and 2% QoQ

–

NIM of 2.84% compared with 2.72% in 2Q15 and 2.86% in 1Q16

–

Loan

yields

improved

2

bps

QoQ

and

deposit

costs

remained

stable

Consumer

Banking

initiatives

—

Retail

checking

households

up

QoQ

and

YoY;

continued

strong

growth

in

student

loans; Financial Consultants up 10% YoY; Mortgage applications and originations up 27% and 36%, respectively

Commercial

Banking

initiatives

—

Strong

loan

growth,

up

10%

YoY;

Capital

Markets

fees

at

new

record

reflecting

continued broadening of our capabilities and rebound in market deal volume

TOP II on track; expense initiatives complete and revenue initiatives well underway

Launched new TOP III efficiency program focused on expense, revenue and tax initiatives to help deliver future

operating leverage in spite of “lower-for-longer” rate environment

2Q16 highlights

3

1)

Non-GAAP item. Where there is a reference to an “Adjusted” result in a paragraph, all measures which follow that “Adjusted” result are also “Adjusted” and exclude restructuring charges and special

items

as

applicable.

See

important

information

on

use

and

reconciliation

of

non-GAAP

items

in

the

Appendix.

There

were

no

net

restructuring

charges

and

special

items

recorded

in

2Q16

or

1Q16.

2)

Current period regulatory capital ratios are preliminary.

Improving

profitability and

returns

Strong capital,

liquidity and funding

Excellent credit

quality and progress

on risk management

Continued progress

on strategic growth,

efficiency and

balance sheet

optimization

initiatives

Robust

capital

levels

with

a

common

equity

tier

1

ratio

of

11.5%

(2)

;

TBV

per

share

up

2%

from

1Q16

to

$25.72

2016 CCAR plan reflects continued commitment towards prudent return of capital with up to $690 million in share

repurchases over the next four quarters and authorization for a 17% increase in the quarterly dividend in 2017

2Q16 average deposits increased $5.4 billion, or 6% vs. 2Q15; average loan-to-deposit ratio of 99.5%

Issued $1.0 billion in senior unsecured bank notes

Provision relatively stable compared to 1Q16

NPLs decreased $35 million, reflecting improvement in commercial and retail

Allowance coverage of NPLs improved to 119% in 2Q16 from 113% in 1Q16 and 114% in 2Q15

On

July

19   ,

closed

previously

announced

TDR

sale

of

$310

million

of

loans

from

HFS

at

a

gain

of

~$70

million;

impact will be reflected in 3Q16 results

GAAP

diluted

EPS

of

$0.46

up

31%

from

2Q15

and

up

15%

from

Adjusted

(1)

diluted

EPS

in

2Q15

Revenue up 7% with Adjusted

(1)

operating leverage of over 3% YoY

Adjusted

(1)

efficiency ratio improved ~2% YoY to 65%

ROTCE of 7.3% increased from 5.9% in 2Q15 and 6.6% in 1Q16

th

2Q16 change from

$s in millions

2Q16

1Q16

2Q15

1Q16

2Q15

$

%

$

%

Net interest income

923

$    

904

$    

840

$    

19

$       

2

%

83

$       

10

%

Noninterest income

355

330

360

25

8

(5)

(1)

Total revenue

1,278

1,234

1,200

44

4

78

7

Noninterest expense

827

811

841

16

2

(14)

(2)

Pre-provision profit

451

423

359

28

7

92

26

Provision for credit losses

90

91

77

(1)

(1)

13

17

Income before income tax expense

361

332

282

29

9

79

28

Income tax expense

118

109

92

9

8

26

28

Net income

243

$    

223

$    

190

$    

20

$       

9

53

$       

28

Preferred dividends

—

$       

7

$         

—

$       

(7)

$       

(100)

—

$       

—

Net income available to common

stockholders

243

$    

216

$    

190

$    

27

$       

13

%

53

$       

28

%

$s in billions

Average interest-earning assets

129.5

$ 

126.2

$ 

123.2

$ 

3.3

$     

3

%

6.3

$     

5

%

Average deposits

104.0

$ 

102.0

$ 

98.5

$   

2.0

$     

2

%

5.4

$     

6

%

Key metrics

Net interest margin

2.84

%

2.86

%

2.72

%

(2)

bps

12

bps

Loan-to-deposit ratio

(2)

98.3

%

99.2

%

96.6

%

(91)

bps

161

bps

ROTCE

(1,3)

7.3

%

6.6

%

5.9

%

69

bps

140

bps

ROTA

(1,4)

0.7

%

0.7

%

0.6

%

4

bps

13

bps

Efficiency ratio

(1)

65

%

66

%

70

%

(95)

bps

(531)

bps

FTEs

(5)

17,828

17,902

17,903

(74)

—

%

(75)

—

%

Per common share

Diluted earnings

0.46

$   

0.41

$   

0.35

$   

0.05

$   

12

%

0.11

$   

31

%

Tangible book value

(1)

25.72

$ 

25.21

$ 

24.03

$ 

0.51

$   

2

%

1.69

$   

7

%

Average diluted shares outstanding

(in millions)

530.4

530.4

539.9

(0.1)

—

%

(9.5)

(2)

%

Financial summary —

GAAP

4

1)

Non-GAAP item. See important information on use of non-GAAP items in the Appendix.

2)

Includes held for sale. Loan-to-deposit ratio is period end.

3)

Return on average tangible common equity.

4)

Return on average total tangible assets.

5)

Full-time equivalent employees.

Linked quarter:

GAAP net income improved 9% and diluted EPS was up 12%

NII up $19 million, reflecting 2% average loan growth

Noninterest income increased $25 million, or 8%, largely reflecting

strength in capital markets, mortgage banking, and service charges

and fees partially offset by a reduction in securities gains

Noninterest expense increased 2%, reflecting higher other operating

expense as well as higher salaries and employee benefits, partially

offset by lower outside services expense

–

Salaries and employee benefits increase largely driven by a change

in timing of merit increases and incentive payments

–

Higher other operating expense reflects higher regulatory, fraud

and insurance costs

Provision for credit losses relatively stable as lower net

charge-offs were offset by a higher reserve build tied to continued

loan growth

Prior-year quarter:

GAAP net income increased $53 million, or 28%, reflecting 8% positive

operating leverage; diluted EPS up 31%

NII

up

$83

million

reflecting

7%

average

loan

growth,

and

a

12

bp

improvement in NIM given higher loan yields and stable deposit costs

Noninterest income down $5 million from 2Q15 levels that exclude the

negative impact of the reclass of $7 million of card reward costs.

Increases in service charges and capital markets fees were more than

offset by lower card fees due to the card reward accounting change

impact, lower mortgage banking fees and a reduction in securities

gains

Noninterest expense was down $14 million, driven by a $40 million

decrease

in

restructuring

charges

and

special

items.

Adjusted

(1)

results reflect an increase in salaries and employee benefits, largely a

change in the timing of merit increases and incentive payments, and

increased software amortization and depreciation expense. 2Q15

results exclude the positive impact of the reclass of $7 million of card

reward costs

–

FTEs down 75 reflecting the benefit of our efficiency initiatives

Provision expense increased $13 million, as lower net charge-offs were

more than offset by a reserve build tied to continued loan growth

Highlights

2Q16 change from

$s in millions

2Q16

1Q16

2Q15

1Q16

2Q15

$

%

$

%

Net interest income

923

$    

904

$    

840

$    

19

$       

2

%

83

$       

10

%

Noninterest income

355

330

360

25

8

(5)

(1)

Total revenue

1,278

1,234

1,200

44

4

78

7

Adjusted noninterest expense

(1)

827

811

801

16

2

26

3

Adjusted pre-provision profit

(1)

451

423

399

28

7

52

13

Provision for credit losses

90

91

77

(1)

(1)

13

17

Adjusted pretax income

(1)

361

332

322

29

9

39

12

Adjusted income tax expense

(1)

118

109

107

9

8

11

10

Adjusted net income

(1)

243

$    

223

$    

215

$    

20

$       

9

28

$       

13

Preferred dividends

—

$       

7

$         

—

$       

(7)

$       

100

—

$       

100

Adjusted net income available to

common stockholders

(1)

243

$    

216

$    

215

$    

27

$       

13

%

28

$       

13

%

$s in billions

Average interest-earning assets

129.5

$ 

126.2

$ 

123.2

$ 

3.3

$     

3

%

6.3

$     

5

%

Average deposits

104.0

$ 

102.0

$ 

98.5

$   

2.0

$     

2

%

5.4

$     

6

%

Key metrics

Net interest margin

2.84

%

2.86

%

2.72

%

(2)

bps

12

bps

Loan-to-deposit ratio

(2)

98.3

%

99.2

%

96.6

%

(91)

bps

161

bps

Adjusted ROTCE

(1,3)

7.3

%

6.6

%

6.7

%

69

bps

63

bps

Adjusted ROTA

(1,4)

0.7

%

0.7

%

0.7

%

4

bps

5

bps

Adjusted efficiency ratio

(1)

65

%

66

%

67

%

(95)

bps

(199)

bps

FTEs

(5)

17,828

17,902

17,903

(74)

—

%

(75)

—

%

Per common share

Adjusted diluted EPS

(1)

0.46

$   

0.41

$   

0.40

$   

0.05

$   

12

%

0.06

$   

15

%

Tangible book value

(1)

25.72

$ 

25.21

$ 

24.03

$ 

0.51

$   

2

%

1.69

$   

7

%

Average diluted shares outstanding

(in millions)

530.4

530.4

539.9

(0.1)

—

%

(9.5)

(2)

%

Adjusted

financial

summary

—

excluding

restructuring

charges

and

special

items

(1)

5

1)

Non-GAAP item. Adjusted results exclude the effect of net restructuring charges and special items associated with efficiency and

effectiveness programs and separation from RBS. See important information on use of non-GAAP items in the Appendix.

2)

Includes held for sale. Loan-to-deposit ratio is period-end.

3)

Adjusted return on average tangible common equity.

4)

Adjusted return on average total tangible assets.

5)

Full-time equivalent employees.

Highlights

Linked quarter:

Net income increased $20 million, or 9%

–

Diluted EPS increased 12%

NII increased $19 million driven by 2% average loan growth

Noninterest income increased $25 million, or 8%, as strong capital

markets fees, mortgage banking fees and service charges and fees were

partially offset by a reduction in securities gains

Noninterest expense increased 2% reflecting higher other operating

expense as well as higher salaries and employee benefits, partially offset

by lower outside services expense

–

Salaries and employee benefits increase largely driven by a change in

timing of merit increases and incentive payments

–

Higher other operating expense reflects higher regulatory, fraud and

insurance costs

Provision for credit losses remained relatively stable as lower net

charge-offs were offset by a higher reserve build tied to continued loan

growth

Prior-year

Adjusted

(1)

quarter:

Net income increased $28 million, or 13%, reflecting over 3% positive

operating leverage; Adjusted diluted EPS up 15%

NII

increased

$83

million,

reflecting

7%

average

loan

growth

and

a

12

bp

improvement in NIM given higher loan yields and stable deposit costs

Noninterest income down $5 million from 2Q15 levels that exclude the

negative impact of the reclass of $7 million of card reward costs.

Increases in service charges and capital markets fees were more than

offset by lower card fees due to the card reward accounting change

impact, lower mortgage banking fees and a reduction in securities gains

Noninterest expense was up 3%, driven by higher salary and employee

benefits expense and increased software amortization and depreciation

expense. 2Q15 results exclude the positive impact of the reclass of $7

million of card reward costs

Salaries and benefits reflect change in timing of merit increases and

incentive payments

–

Efficiency

ratio

improved

~200

bps

(1)

–

FTEs down 75 reflecting the benefit of our efficiency initiatives

Provision expense increased $13 million as lower net charge-offs were

more than offset by a higher reserve build tied to continued loan growth

Net interest income

6

Highlights

1)

Includes interest-bearing cash and due from banks and deposits in banks.

Linked quarter:

NII up $19 million, or 2%

Reflects 2% average loan growth driven by commercial and

student loans

NIM of 2.84% remained relatively stable, down 2 bps

Higher loan yields and better mix were more than offset by the

impact of a reduction in long-term rates on the securities

portfolio and higher long-term debt issuance

Deposit costs remained flat reflecting continued pricing

discipline

Prior-year quarter:

NII up $83 million, or 10%, with NIM up 12 bps

7% average loan growth

Growth in NIM reflects improving retail and commercial loan

yields and portfolio mix and the impact of higher short-term

rates, partially offset by lower long-term rates

Deposit costs flat YoY as tactical actions offset the impact of

higher short-term rates

Net interest income

$s in millions,

except earning

assets

Average interest-earning assets

Average interest-earning assets

Net interest income

Net interest margin

$s in billions

2Q15

3Q15

4Q15

1Q16

2Q16

Retail loans

$50.9

$51.6

$52.4

$53.2

$53.5

Commercial loans

44.7

45.2

45.8

47.0

49.1

Investments and cash

(1)

27.1

25.8

25.7

25.5

26.0

Loans held for sale

0.5

0.5

0.3

0.4

0.8

Total interest-earning assets

$123.2

$123.0

$124.2

$126.2

$129.5

Loan yields

3.30%

3.32%

3.34%

3.46%

3.48%

Total cost of funds

0.40%

0.41%

0.41%

0.40%

0.42%

$123B

$123B

$124B

$126B

$129B

$840

$856

$870

$904

$923

2Q15

3Q15

4Q15

1Q16

2Q16

2.72%

2.76%

2.77%

2.86%

2.84%

2.86%

2.84%

0.03%

(0.02)%

(0.01)%

(0.02)%

1Q16 NIM%

Loan

yields

Investment

portfolio

yield

Deposit

costs

Borrowing

costs/other

2Q16 NIM%

2.72%

2.84%

0.14%

(0.01)%

0.00%

(0.01)%

2Q15 NIM%

Loan

yields

Investment

portfolio

yield

Deposit

costs

Borrowing

costs/other

2Q16 NIM%

Net interest margin

7

NIM walk 2Q15 to 2Q16

NIM walk 1Q16 to 2Q16

Linked quarter:

Noninterest income increased $25 million, or 8%, driven by

strength in nearly every category

Service

charges

and

fees

increased

$6

million

driven

by

higher

volumes from seasonally lower 1Q16 levels as well as

improved pricing

Card fees and trust and investment services fees were up

slightly

Mortgage banking fees increased $7 million reflecting higher

application and origination volumes and improved sale

volumes and spreads, as well as an improved mortgage

servicing rights (“MSR”) valuation

Capital markets fees improved $13 million reflecting continued

broadening of our capabilities and cross sell, as well as a strong

increase in deal volume from lower 1Q16 levels

Securities gains down by $5 million

Prior-year quarter:

Noninterest income decreased $5 million, or 1%; excluding

card reward accounting change growth was 1%

Service charges and fees increased $11 million driven by

improved pricing and volume

Card fees were down $9 million from 2Q15 levels that exclude

the negative impact of the reclass of $7 million of card reward

costs

Trust and investment services fees decreased $3 million given

the changing mix of product sales

Mortgage banking fees decreased $5 million from 2Q15 levels,

largely reflecting the significant 2Q15 MSR valuation gain

Capital markets fees increased $5 million, reflecting a record

quarter as we broaden our capabilities

2Q16 change from

2Q16

1Q16

2Q15

1Q16

2Q15

$

%

$

%

Service charges and fees

150

$     

144

$     

139

$     

6

$         

4

%

11

$       

8

%

Card fees

51

50

60

1

2

(9)

(15)

Trust & investment services fees

38

37

41

1

3

(3)

(7)

Mortgage banking fees

25

18

30

7

39

(5)

(17)

Capital markets fees

35

22

30

13

59

5

17

FX & LC fees

21

21

22

—

—

(1)

(5)

Securities gains, net

4

9

9

(5)

(56)

(5)

(56)

Other income

(1)

31

29

29

2

7

2

7

Noninterest income

355

$     

330

$     

360

$     

25

$       

8

%

(5)

$        

(1)

%

$355

$330

$360

2Q16

1Q16

2Q15

Service charges and fees

Card fees

Trust and inv services

FX & LC fees

Mortgage banking fees

Capital markets fee income

Securities gains (losses)

Other income

Noninterest income

8

Highlights

1)

Other income includes bank-owned life insurance and other income.

$s in millions

(1)

2Q16 change from

$s in millions

2Q16

1Q16

2Q15

1Q16

2Q15

$

%

$

%

Adjusted salaries and benefits

(1)

432

$     

425

$     

405

$        

7

$         

2

%

27

$        

7

%

Adjusted occupancy

(1)

76

76

75

—

—

1

1

Equipment expense

64

65

65

(1)

(2)

(1)

(2)

Adjusted outside services

(1)

86

91

83

(5)

(5)

3

4

Amortization of software

41

39

37

2

5

4

11

Adjusted other expense

(1)

128

115

136

13

11

(8)

(6)

Adjusted noninterest expense

(1)

827

$     

811

$     

801

$        

16

$       

2

%

26

$        

3

%

Restructuring charges and special items

—

—

40

—

—

(40)

(100)

Total noninterest expense

827

$     

811

$     

841

$        

16

$       

2

%

(14)

$      

(2)

%

$827

$811

$801

65%

66%

67%

2Q16

1Q16

2Q15

Adjusted all other

Adjusted occupancy & equip

Adjusted salary and benefits

Adjusted efficiency ratio

Adjusted noninterest expense —

excluding restructuring charges and special items

(1)

Linked quarter:

Noninterest expense increased $16 million, or 2%

Salaries and employee benefits up $7 million, largely

related to a change in timing of merit increases and

incentive payments

FTEs down 74 linked quarter

reflecting the benefit

of our efficiency initiatives

Outside services down $5 million, reflecting the benefits

of procurement initiatives

Amortization of software expense up $2 million, reflecting

continued investments in applications and infrastructure

Other expense increased $13 million, driven primarily by

higher regulatory, fraud and insurance costs

Prior-year quarter:

Noninterest expense increased $26 million, or 3%, from

Adjusted 2Q15 levels

(1)

Salaries and employee benefits up $27 million largely

related to the timing of merit increases and incentive

payments, which drove higher payroll taxes and

retirement plan contributions

FTEs down 75 vs prior year reflecting the benefit of

our efficiency initiatives

Outside services increased $3 million, largely reflecting

increased consumer loan volumes and vendor

outsourcing

Amortization of software expense increased $4 million,

reflecting continued investments in applications and

infrastructure

Other expense decreased $8 million, reflecting the impact

of the card reward accounting change

9

Highlights

1)

Non-GAAP

item.

Adjusted

results

exclude

the

effect

of

net

restructuring

charges

and

special

items

associated

with

efficiency

and

effectiveness

programs

and

separation from RBS. See important information on use of non-GAAP items in the Appendix.

.

(1)

(1)

(1)

(1)

(1)

(1)

(1)

Full-time equivalents (FTEs)

17,828

17,902

17,903

2Q16 change from

$s in billions

2Q16

1Q16

2Q15

1Q16

2Q15

$

%

$

%

Investments and interest bearing

deposits

26.0

$   

25.5

$   

27.1

$   

0.5

$      

2

%

(1.1)

$    

(4)

%

Total commercial loans

49.1

47.0

44.7

2.1

4

4.4

10

Total retail loans

53.5

53.2

50.9

0.3

1

2.6

5

Total loans and leases

102.7

100.3

95.6

2.4

2

7.1

7

Loans held for sale

0.8

0.4

0.5

0.5

128

0.4

78

Total interest-earning assets

129.5

126.2

123.2

3.3

3

6.3

5

Total noninterest-earning assets

12.7

12.6

12.3

0.1

1

0.4

3

Total assets

142.2

$ 

138.8

$ 

135.5

$ 

3.4

$      

2

6.7

$      

5

Low-cost core deposits

(1)

55.2

53.6

51.1

1.7

3

4.2

8

Money market deposits

36.2

36.2

34.9

—

—

1.3

4

Term deposits

12.6

12.2

12.6

0.4

3

—

—

Total deposits

104.0

$ 

102.0

$ 

98.5

$   

2.0

$      

2

5.4

$      

6

Total borrowed funds

15.0

13.9

14.8

1.2

8

0.3

2

Total liabilities

122.2

$ 

119.0

$ 

115.9

$ 

3.2

$      

3

6.3

$      

5

Total stockholders' equity

20.0

19.8

19.6

0.2

1

0.4

2

Total liabilities and equity

142.2

$ 

138.8

$ 

135.5

$ 

3.4

$      

2

%

6.7

$      

5

%

Consolidated average balance sheet

Linked quarter:

Total earning assets up $3.3 billion, or 3%, with loan

growth of $2.4 billion, or 2%

Commercial loans up $2.1 billion, driven by

strong growth in Mid-corporate and Industry

Verticals, Commercial Real Estate, Corporate

Finance and Franchise Finance

Retail loans up $324 million, driven by Education

Finance

Total deposits increased $2.0 billion on strength in

low-cost core deposits

Prior-year quarter:

Total earning assets up $6.3 billion, or 5%

Commercial loans up 10% driven by strength in

CRE, Mid-corporate

and Industry Verticals,

Corporate Finance and Franchise Finance

Retail loans up 5%, driven by growth in

Education Finance, Home Mortgage and Auto

Finance

Total deposits up $5.4 billion, or 6%, reflecting

strength in low-cost core deposits

Borrowed funds increased $266 million

Reflects growth in long-term senior debt and

long-term FHLB borrowings, which replaced

short-term FHLB borrowings and repos, as we

continue to align our funding structure with

peers

10

Highlights

Note: Loan portfolio trends reflect non-core portfolio impact not included in segment results on pages 11 & 12.

1)

Low-cost core deposits include demand, checking with interest and regular savings.

$129.5 billion

Interest-earning assets

$119.0 billion

Deposits/borrowed funds

Total

Retail

42%

Total

Commercial

38%

CRE

Other

Commercial

Residential

mortgage

Total home

equity

Automobile

Other

Retail

Investments

and

interest-bearing

deposits

Retail /

Personal

Commercial/

Municipal/

Wholesale

Borrowed

funds

7%

31%

10%

14%

11%

7%

20%

49%

38%

13%

$11.1

$11.6

$12.2

$12.7

$12.9

$18.0

$17.6

$17.2

$17.0

$16.6

$13.5

$13.8

$13.8

$13.8

$14.0

$2.7

$3.2

$3.7

$4.5

$5.1

$3.1

$3.0

$3.0

$3.0

$2.9

$2.3

$2.4

$2.6

$2.5

$2.5

$50.7B

$51.6B

$52.5B

$53.5B

$54.0B

2Q15

3Q15

4Q15

1Q16

2Q16

Mortgage

Home Equity

Auto

Student

Business Banking

Other

Consumer Banking average loans and leases

11

1)

Other includes Credit Card, RV, Marine, Other.

$s in billions

Linked quarter:

Average loans increased $538 million, or 1%, largely reflecting

growth in higher yielding student and mortgage loans partially

offset by the impact of the TDR loans transferred to held for sale

Consumer loan yields up 4 bps, reflecting the benefit of

continued improvement in mix

Prior-year quarter:

Average loans increased $3.3 billion, or 7%, as growth of

$2.4 billion in student, $1.8 billion in mortgages, $490 million in

auto and $337 million in other unsecured retail was partially

offset by a $1.4 billion decrease in home equity outstandings

Consumer loan yields up 20 bps, reflecting initiatives to improve

risk-adjusted returns and higher interest rates

Highlights

Average loans and leases

(1)

Yields

3.68%

3.69%

3.73%

3.84%

3.88%

Yields

2.56%

2.57%

2.57%

2.75%

2.80%

$6.4

$6.2

$6.5

$6.4

$6.9

$3.0

$3.0

$3.1

$3.5

$4.1

$3.2

$3.3

$3.5

$3.9

$4.2

$12.2

$12.0

$11.8

$11.9

$11.9

$6.1

$6.1

$6.1

$6.2

$6.1

$7.7

$8.2

$8.5

$8.7

$9.2

$2.7

$3.0

$3.0

$3.2

$3.5

$41.3B

$41.8B

$42.5B

$43.8B

$45.9B

2Q15

3Q15

4Q15

1Q16

2Q16

Mid-Corporate

Industry Verticals

Franchise Finance

Middle Market

Asset Finance

Commercial Real Estate

Other

Commercial Banking average loans and leases

Linked quarter:

Average loans up $2.1 billion, or 5%, with strong growth in Mid-

corporate and Industry Verticals, Commercial Real Estate,

Corporate Finance and Franchise Finance

—

Results reflect robust loan demand coupled with enhanced

client-

targeting efforts, along with continued pricing and

credit discipline

Loan yields increased 5 bps given higher interest rates and

improved mix

Prior-year quarter:

Average loans up $4.6 billion, or 11%, on strength in Mid-corporate

and Industry Verticals, Commercial Real Estate, Franchise Finance

and Corporate Finance

Loan yields increased 24 bps reflecting higher rates and improved

mix

12

1)

Other includes Business Capital, Govt, Corporate Finance, Treasury Solutions, Corporate and Commercial Banking Admin.

Highlights

$s in billions

Average loans and leases

(1)

$43.0

$44.6

$44.6

$44.6

$44.9

$26.4

$26.8

$27.5

$27.2

$27.5

$16.6

$16.9

$17.1

$18.0

$19.0

$12.6

$12.7

$12.2

$12.2

$12.6

$4.4

$2.9

$1.6

$0.9

$1.0

$6.5

$5.1

$5.0

$3.1

$3.7

$3.9

$4.1

$6.0

$9.9

$10.3

$113.3B

$113.0B

$114.0B

$115.9B

$119.0B

2Q15

3Q15

4Q15

1Q16

2Q16

Money market & savings

DDA

Checking with interest

Term deposits

Total fed funds & repo

Short-term borrowed funds

Total long-term borrowings

Deposit cost of funds

0.24%

0.25%

0.24%

0.24%

0.24%

Total cost of funds

0.40%

0.41%

0.41%

0.40%

0.42%

Average funding and cost of funds

Linked quarter:

Total average deposits up $2.0 billion

Largely growth in lower-cost checking with interest,

demand deposits, term deposits and savings

Total deposit costs remained stable, reflecting continued

pricing discipline and growth in DDA

Continued progress in repositioning liability structure to align

better with peers

Issued $1 billion in five-year senior bank notes amid strong

demand and reflecting broadened market access

Prior-year quarter:

Total average deposits increased $5.4 billion, or 6%, on strength

across most categories

Total deposit costs remained stable reflecting continued

pricing discipline despite higher interest rates

Total borrowed funds cost increase reflects continued shift

away from short-term funding

13

Highlights

Average interest-bearing liabilities and DDA

$s in billions

$1,201

$1,201

$1,216

$1,224

$1,246

114%

116%

115%

113%

119%

2Q15

3Q15

4Q15

1Q16

2Q16

Allowance for loan and lease losses

NPL coverage ratio

$7

$5

($3)

$9

$2

$68

$66

$73

$67

$56

$3

$4

$7

$7

$7

$78

$75

$77

$83

$65

0.33%

0.31%

0.31%

0.33%

0.25%

2Q15

3Q15

4Q15

1Q16

2Q16

Commercial

Retail

SBO

Net c/o ratio

$78

$75

$77

$83

$65

$77

$76

$91

$91

$90

$1.1B

$1.0B

$1.1B

$1.1B

$1.0B

2Q15

3Q15

4Q15

1Q16

2Q16

Net charge-offs

Provision for credit losses

1.24%

1.23%

1.23%

1.21%

1.20%

Allowance to loan coverage ratio

Overall credit quality improved during the quarter with a decrease in both charge-

offs and NPLs

Net charge-offs of $65 million, or 0.25% of average loans and leases decreased $18

million from 1Q16;

Retail product net charge-offs of $63 million were $11 million lower than 1Q16

levels

Commercial net charge-offs of $2 million decreased from $9 million in 1Q16

NPLs to total loans and leases improved to 1.01% reflecting improvement in

commercial and retail categories

Provision for credit losses of $90 million stable with 1Q16

Allowance to NPL ratio improved to 119%

Strong credit quality trends continue

14

Highlights

1)

Allowance for loan and lease losses to nonperforming loans and leases.

$s in millions

Net charge-offs (recoveries)

NPLs to loans

and leases

NPLs

(1)

1.09%

1.06%

1.07%

1.07%

1.01%

Provision for credit losses, charge-offs, NPLs

Allowance for loan and lease losses

15.3%

15.4%

15.3%

15.1%

14.9%

11.8%

11.8%

11.7%

11.6%

11.5%

2Q15

3Q15

4Q15

1Q16

2Q16

Total capital ratio

Common equity tier 1 ratio

97%

96%

97%

99%

98%

2Q15

3Q15

4Q15

1Q16

2Q16

as of

$s in billions (period-end)

2Q15

3Q15

4Q15

1Q16

2Q16

Basel III transitional basis

(1,2)

Common equity tier 1 capital

13.3

$     

13.2

$     

13.4

$     

13.6

$     

13.8

$     

Risk-weighted assets

112.1

$   

112.3

$   

114.1

$   

116.6

$   

119.5

$   

Common equity tier 1 ratio

11.8 %

11.8 %

11.7 %

11.6 %

11.5 %

Total capital ratio

15.3 %

15.4 %

15.3 %

15.1 %

14.9 %

Basel III fully phased-in

(1,3)

Common equity tier 1 ratio

11.8%

11.7%

11.7%

11.6%

11.5%

Basel III minimum for CET1 ratio

2015

2016

2017

2018

2019

Basel III minimum plus phased-in

capital conservation buffer

4.5 %

5.1 %

5.8 %

6.4 %

7.0 %

Capital and liquidity remain strong

15

Highlights

1)

Current reporting period regulatory capital ratios are preliminary.

2)

Basel III ratios assume that certain definitions impacting qualifying Basel III capital will phase in through 2019. Ratios also reflect the required U.S. Standardized methodology for calculating RWAs,

effective January 1, 2015.

3)

This is a non-GAAP financial measure. See important information on use of non-GAAP items in the Appendix.

4)

Based on the September 2014 release of the U.S. version of the Liquidity Coverage Ratio (LCR). Note that as a modified LCR company, CFG’s minimal LCR requirement of 90% began January 2016.

5)

Period end includes held for sale.

Capital levels remain above regional peers

2Q16 Basel III common equity tier 1 ratio (transitional

basis) down approximately 12 basis points from 1Q16

Net income: ~21 bps increase

RWA growth: ~29 bps decrease

Dividends & other: ~4 bps decrease

LDR of 98% improved from 1Q16

Fully

compliant

with

LCR

requirement

(4)

Issued $1.0 billion in senior unsecured bank notes

2016 CCAR plan reflects continued commitment towards

prudent return of capital with $690 million in share

repurchases

Loan-to-deposit ratio

(5)

Capital ratio trend

(1,2)

(1,2)

Initiative

2Q16

Status

Commentary

Reenergize household growth

Retail checking HHs up QoQ and YoY with new checking  HH first year attrition improvements. Deposits up 3% 

and services charges up 5% YoY.

Expand mortgage sales force

Application and origination volumes up 20% and 42% QoQ with improved throughput as operational issues

have been addressed. Achieved highest pipeline roll rate since TRID / platform implementation. LOs up 16

QoQ

to 451.

Grow Auto

Selectively raising price to moderate origination volumes; organic originations yields up 33 bps YoY.

Grow Student/Installment

Sustained momentum in Student with total loan balances up 91% from 2Q15. Continued steady growth in

iPhone

upgrade program (iUp).

Expand Business Banking

Increasing focus on deposits, cash management, and other fee income streams driving deposits up 4% and

deposit fees up 7% compared to 2Q15.

Expand Wealth sales force

Financial

consultants

up

10%

YoY

to

339.

Enhancing

and

expanding

product

set

and

transitioning

to

more

balanced fee-based model.

Build out Mid-Corp & verticals

Loan

growth

of

over

20%

YoY;

improving

capital

markets

cross sell

with

particular

strength

in

fixed

income.

Continue development of Capital

and Global Markets activities

Fee

income

up

15%

YoY

driven

by

improved

deal

volume

and

bond

market

conditions.

Mid-May

commencement

of broker dealer provided incremental fee opportunities. Enhanced FX and Interest-rate platform.

Build out Treasury Solutions

Fees up

16% vs. 2Q15 led by strength in core cash management services, TOP II pricing initiative, and

commercial card.

Grow Franchise Finance

Strong

growth with balances up 19% YoY. Continue expansion in well-established brands of quick service and

fast casual franchises.

Expand Middle Market

Portfolio

relatively

stable

compared

to

1Q16.

Deposits

up

~$750

million,

or

12%,

and

fee

income

up

16%

versus

prior year quarter.

Grow CRE

Continued to deepen client penetration with top developers in core geographies. CRE loans up 6% QoQ and

20% YoY to $9.2 billion,

but moderating growth in  a number of select areas such as multi-family in D.C. metro.

Reposition Asset Finance

Driving

increased

penetration

with

Middle

Market

customer

base,

helping

to

offset

reductions

in

RBS

referral

business.

Initiatives targeting transportation, construction, and renewable sectors driving higher margins.

Balance Sheet Optimization

Continued

execution

of

balance

sheet

strategies

including

loan

pricing

and

mix.

Cost

of

deposits

remained

flat

from 1Q16 at 24 bps. $310 million TDR transaction executed in July.

TOP II

TOP II program is well underway and remains on track to deliver $95-$100 million of P&L benefit in 2016.

TOP III

TOP III Program has been launched with heavier emphasis on efficiency initiatives. Targeting 2017 run-rate

benefit of $90-$110 million.

Summary of progress on strategic initiatives

16

Citizens operating leverage has been highly

consistent: we’ve delivered positive YoY results in

the past 8 consecutive quarters

Citizens has regularly exceeded average peer

operating leverage

Keys to future revenue growth include

–

Use strong capital position to grow loans and

add customers

–

Build up fee businesses to capture

franchise potential

–

Protect NIM through skillful asset and

deposit initiatives

Expense discipline centers around self-funding of

gaps and growth initiatives

–

Gaps include technology and risk/regulatory

catch-up

–

Growth initiatives include customer-facing

colleagues in Commercial, Wealth, Mortgage,

data analytics and product/technology builds

Citizens continues to deliver positive operating leverage

17

Highlights

$s in millions

Peer data Source: Bloomberg.

1)

Non-GAAP item. See important information on use of non-GAAP items in the Appendix.

2)

1H16 Peer average reflects Bloomberg consensus estimates as of 7/12/16. Peer group includes BBT, CMA, FITB, KEY, MTB, PNC, RF, STI, USB. MTB excluded from

peer average due to recent acquisition.

1H15

2H15

1H16

Adjusted Revenue

(1)

2,383

$     

2,441

$     

2,512

$     

Adjusted Expense

(1)

1,601

$     

1,608

$     

1,638

$     

Adjusted Operating leverage

(1)

3.9  %

2.5  %

3.1  %

Operating

leverage

-

peer

average

(2)

(2.7) %

(1.0) %

0.9  %

Citizens’ ROTCE levels primarily reflect sub-par revenue achievement

18

$s in millions

Relatively low-fee revenue capture is being addressed through growth initiatives

Other contributing factors to low ROTCE include excess capital position and high tax rate, also being addressed

0.13%

0.38%

CFG

Peer

average

CFG data as of 2Q16 unless otherwise noted, peer data as of 1Q16 and sourced from SNL Financial and company filings.

1)

Peer average includes BBT, CMA, FITB, KEY, PNC, RF, STI and USB. MTB excluded due to recent acquisition.

2)

Peer average includes BBT, CMA, FITB, KEY, MTB, PNC, RF, STI and USB.

3)

Capital Markets fees defined as trading revenue, investment banking, advisory and underwriting fees. Peers includes BBT, CMA, KEY, MTB, RF and STI.

4)

Source: Treasury Strategies, Inc. for benchmarks and public filings, estimate of 2015 market share of ~$40B revenue, NII and fees market based on benchmarks and public

filings. TS peers include STI, FITB, PNC and USB. Treasury Solutions revenue includes Treasury Management, Accounts Receivable, Payables, Procurement and related Risk

and Financial Control activities. 2015 estimated growth rates based on fee income only.

5)

Non-GAAP item. See important information on use of non-GAAP items in the Appendix.

0.4%

0.5%

CFG

Peer

average

Capital Markets revenue potential

(FY 2015 Capital Markets fees/

FY 2015 Average Commercial loans)

(3)

Treasury Solutions revenue potential

(FY 2015 NII & Fee income/

$1 billion of commercial loans

(4)

)

0.99%

1.22%

CFG

Peer

Average

0.64%

0.76%

CFG

Peer

Average

Revenue-capture opportunity

(Revenue/Average interest-earning assets

(1)

)

Expense levels less the issue

(Expense/Average interest-earning assets

(1)

)

$9

$18

CFG

TS Peer

Average

68.7%

61.9%

64.7%

62.5%

CFG

Peer

Average

FY14

2Q16

FY14

1Q16

Improving efficiency ratio

(Adjusted Operating expense/Adjusted Revenue

(1)

)

(5)

Wealth opportunity to drive

fee income growth

(FY 2015 Wealth Fees/FY 2015 Earning Assets

(2)

)

2016 targeted

pre-tax benefit

Category

Name

Description

Revenue

Expense

Progress to date

Efficiencies

Operations

Transformation

Refine operating model to simplify

organization, reduce costs, improve

service levels and enhance controls

$25-$30

•

Executed

operating model changes

in 2015. Achieved full

run-rate savings in 2Q15.

Procurement

Achieve cost-reduction opportunities

through further vendor-management

consolidation and tighter standards

$15-$20

•

2016 run-rate

savings complete in 2016. Driven by

reduction in external resources and tightening of internal

travel and office supplies policies.

Pricing

Commercial Lending/  

Treasury Services

Improve customer pricing

methodology to better align with

competitive landscape;

utilizing

enhanced client segmentation

$20-$25

•

Commercial pricing initiatives have been fully

implemented resulting in average lending pricing up-lift of

10%+.

•

Treasury Services has re-priced ~12,000 accounts and

increases are tracking to expectations.

Revenue

Consumer distribution 

channel effectiveness

Launch effort to improve branch and

contact center sales effectiveness,

with the goal of deepening customer

relationships

$15-$20

•

“Citizens Checkup” rolled

out

to all branches and 

exceeding expectations on quality of customer

engagement and satisfaction.   Continuing to drive  to

business case levels of 1-2 incremental sales per branch

per week, though sales skewed towards  recurring revenue

so taking longer to achieve run rate.

Commercial and

Consumer

Develop improved high-value

customer-retention programs and

enhanced tools and analytics to

improve cross-sell efforts

$15-$20

•

Commercial:  Launched new tools to

prioritize

opportunities and enhanced sales routine to ensure

product partner alignment,

resulting in Middle Market

pipeline at 2x historical level.

•

Consumer

Retention:  Continued progress on improving

pricing of deposits. Platinum experience  and the Home

Equity Retention Unit were launched in June; early results

are positive.

Total

$50-$65

$40-$50

$90-$115

TOP II has delivered well across revenues and expenses

19

Current estimate is to deliver $95-100 million benefit in 2016

end 2017

Name

Description

Revenue

Expense

Consumer

Reducing staff in non-revenue areas and driving further

efficiencies in the distribution network

–

$33-35

Commercial

Streamlining end-to-end loan process including relationship

management coverage models, portfolio management and

operations

–

$8-10

Functions

Simplifying and re-engineering process in each of the

functional areas (focus on Finance, HR, Risk, Technology)

–

$10-15

Attrition

management

Using analytics to predict and reach-out to at-risk commercial

customers

$12-15

–

Unsecured

lending

Launching new product using data & analytics capabilities to

target customers

$10-15

–

Total targeted

pre-tax impact

Executing on several initiatives (R&D, renewable, other tax

credits) to align tax rate to peer levels - Expected to result in

2017 tax rate of ~31%

After-tax benefit

Pre-tax equivalent benefit

Total pre-tax

equivalent

benefit

$17-20

Efficiencies

Revenue

enhancements

Targeted annual run-rate benefit

Tax

efficiencies

Tax         

efficiences

Net tax benefit

$10-15*

$90-110

$73-90

TOP III is taking shape, greater emphasis on expenses

20

$s in millions

Program is designed to improve overall efficiency and effectiveness of the organization while providing

the ability to self fund investments that drive future growth

* Noninterest income impact: ($20) to ($25); tax expense benefit of $30 to $40.

Committed to delivering positive operating leverage

21

Forward curve currently projects very low probability of Fed rate increase over 2016/2017; current curve

has flattened, with the long end significantly lower

While this creates some headwind, we have been delivering solid operating leverage, EPS growth and

ROTCE improvement over past two years with no net rate benefit, as the one move in the Fed Funds rate

has been more than offset by the impact of the flattened yield curve

Key is to continue to execute well against our plan

TOP III benefit positive for 2017 outlook, will be used towards positive operating leverage objective.

Continue to contain expense growth while self-funding investments to drive fee income capabilities and

growth

Expect to reinvest roughly 30-40% of the approximately $70 million TDR gain to fund costs associated with

TOP III efficiencies

and continued optimization of the balance sheet

We achieved a successful CCAR/DFAST outcome

22

Highlights

$s in millions

Strong capital position permits aggressive loan

growth and shareholder return of capital, while

maintaining peer-leading CET1 ratio

Will continue to be prudent in CCAR process given

need for higher earnings and ROTCE improvement

Fed CCAR post-stress credit results indicate high

quality loan book relative to peers

Citizens has made strong progress in improving all

qualitative aspects of the framework 

2015 CCAR

2015 CCAR

2016 CCAR

Authorization

5 Quarters

4-Quarter

Pro forma

4 Quarters

Dividends

285

$           

228

$           

280

$           

Share repurchases

500

400

690

Total common payout

785

$           

628

$           

970

$           

54% greater

TDR transaction highlights

23

Highlights

TDR transaction detail

$s in millions

Sold $310 million of TDR assets on July 19

th

and

recorded a 3Q16 ~$70 million gain on sale through

other income

–

Plan to utilize roughly 30-40% of the TDR

Transaction gain to fund costs associated with

efficiency initiatives and other balance sheet

optimization costs in 3Q16

Transaction improves asset quality and provides

ability to further improve risk-adjusted returns as

well as reducing CCAR stressed loss levels

Held for sale

Transfers

Paydowns

Sold

Mortgage

Home

Equity

Total

Total

Total

Total

Performing

222

$   

54

276

$   

(34)

$          

(3)

$             

239

$         

Nonperforming

66

$      

31

97

$      

(25)

$          

(1)

$             

71

$            

Total

288

$   

85

$      

373

$   

(59)

$          

(4)

$             

310

$         

3Q16 outlook

(1)

24

Net interest income,

net interest margin

Noninterest expense

Credit trends,

tax rate

~1.5% Loan growth

Slight decline in net interest margin

Relatively stable

Committed to YoY operating leverage goals

Broad credit trends remain favorable

Provision expense stable

Tax rate of ~32%

3Q16 expectations vs. 2Q16

(1)

Capital, liquidity and

funding

Quarter-end Basel III common equity tier 1 ratio ~11.3%

Loan-to-deposit ratio of ~99%

Noninterest

income

Low-single digit growth

1)

Does not reflect the benefit of 3Q16 TDR transaction gain of ~$70 million; roughly 30-40% of this gain is expected to be

used to fund costs associated with TOP III initiative as well as other initiatives to improve balance sheet efficiency and

effectiveness

Key messages

25

Citizens once again delivered strong results in 2Q16

–

Financial results continue to improve and meet expectations

–

Delivering against strategic initiatives with strong growth in Capital Markets and improving

results in Mortgage Banking

–

Continued execution on balance sheet optimization strategies providing underlying strength and

momentum

–

NIM performing well in challenging environment, continued prudent loan growth, TDR

sale provides further credit quality and risk-adjusted return benefits

–

Tangible book value

(1)

per share continues to grow; $25.72 at quarter end, up 2% from 1Q16

–

Continued progress on regulatory and capital framework with another successful CCAR

outcome; continued focus on generating enhanced shareholder returns and increased capital

returns

2H16 will continue to focus on delivering well despite interest-rate headwinds

–

Comprehensive plan to deliver well for all stakeholders

–

Key to financial results is to grow the balance sheet smartly with continued focus on building out

fee businesses and delivering positive operating leverage

–

Launched TOP III initiatives to help fund future investments and focus on continuous

improvement

Capital and credit position remain strong

–

Peer leading CET1 ratio permits both strong loan growth and returns to shareholders

–

Overall credit metrics continue to improve; portfolio performed well relative to peers in CCAR

stress test

1)

Non-GAAP item. See important information on use of non-GAAP items in the Appendix.

*

*

*

*

*

*

*

*

*

*

*

Appendix

26

$399

$451

2Q15

2Q16

0.67%

0.72%

2Q15

2Q16

$215

$243

$0.40

$0.46

2Q15

2Q16

6.7%

7.3%

2Q15

2Q16

Quarter-over-quarter results

27

Adjusted pre-provision profit

$s in millions

Adjusted return on average

tangible assets

Adjusted net income

$s in millions

1)

Adjusted results are non-GAAP items and exclude the effect of net restructuring charges and special items associated with efficiency and effectiveness programs and separation from RBS.

See important information on use of non-GAAP items in the Appendix.

2)

Excludes loans held for sale.

Adjusted return on average

tangible common equity

63 bps

5 bps

13%

13%

Period-end loans

$s in billions

Period-end deposits

$s in billions

15%

Adjusted Diluted EPS

(1)

(1)

(1)

(1)

(2)

(1)

$106.3

7%

6%

$100.6

$103.6

$96.5

2Q15

2Q16

2Q15

2Q16

$423

$451

1Q16

2Q16

0.68%

0.72%

1Q16

2Q16

$223

$243

$0.41

$0.46

1Q16

2Q16

6.6%

7.3%

1Q16

2Q16

Linked-quarter results

28

4 bps

69 bps

7%

Diluted EPS

12%

Pre-provision profit

$s in millions

Return on average tangible assets

Period-end loans

$s in billions

(1)

Net income

$s in millions

Return on average tangible

common equity

Period-end deposits

$s in billions

3%

1)

Excludes loans held for sale.

2)

Non-GAAP item. See important information on use of non-GAAP items in the Appendix.

9%

$102.6

4%

(2)

(2)

$101.0

$106.3

$103.6

1Q16

2Q16

1Q16

2Q16

Consumer Banking segment

29

1)

Non-GAAP item. Adjusted results exclude the effect of net restructuring charges and special items associated with efficiency and effectiveness programs and separation from RBS.

See important information on use of non-GAAP items in the Appendix.

2)

Includes held for sale.

3)

Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent

to a sustainable target level for tier 1 common equity and then allocate that approximation to the segments based on economic capital.

Highlights

Linked quarter:

Net income up $19 million, or 27%

Net interest income up $21 million, driven by higher loan

balances and improved loan and deposit spreads

Average loans and deposits up slightly

Noninterest income increased $11 million, driven by mortgage

banking and service charges and other fees

Mortgage banking fees reflect higher application and

origination volumes

Noninterest expense increased $16 million, reflecting higher

salary and benefits expense related to timing of merit increases

and incentive payments, higher regulatory, fraud and insurance

costs and higher outside services expense

Prior-year quarter:

Net income up $24 million, or 36%

Total revenue up $47 million reflecting strength in net interest

income, largely related to the benefit of an increase in average

student, mortgage, auto and consumer unsecured loans and

improved deposit spreads

Average loans up $3.3 billion and average deposits up

$1.9 billion

Noninterest expense increased $19 million, or 3%, given

continued investment in the business to drive further growth

2Q16 change from

$s in millions

2Q16

1Q16

2Q15

1Q16

2Q15

$

%

$

%

Net interest income

602

$     

581

$     

544

$     

21

$       

4

%

58

$       

11

%

Noninterest income

219

208

230

11

5

(11)

(5)

Total revenue

821

789

774

32

4

47

6

Noninterest expense

632

616

613

16

3

19

3

Pre-provision profit

189

173

161

16

9

28

17

Provision for credit losses

49

63

60

(14)

(22)

(11)

(18)

Income before income tax

expense

140

110

101

30

27

39

39

Income tax expense

50

39

35

11

28

15

43

Net income

90

$       

71

$       

66

$       

19

$       

27

%

24

$       

36

%

Average balances

$s in billions

Total loans and leases

(2)

54.4

$   

53.7

$   

51.0

$   

0.6

$      

1

%

3.3

$      

7

%

Total deposits

71.9

$   

70.9

$   

70.0

$   

1.0

$      

1

%

1.9

$      

3

%

Mortgage Banking metrics

Originations

1,964

$ 

1,386

$ 

1,523

$ 

578

$     

42

%

441

$     

29

%

Origination Pipeline

2,528

2,126

1,897

402

19

%

631

33

%

Gain on sale of secondary

originations

2.42%

2.40%

2.18%

2

bps

24

bps

Performance metrics

ROTCE

(1,3)

7.1%

5.6%

5.7%

150

bps

143

bps

Efficiency ratio

(1)

77%

78%

79%

(110)

bps

(227)

bps

Commercial Banking segment

30

1)

Non-GAAP item. See important information on use of non-GAAP items in the Appendix.

2)

Includes held for sale.

3)

Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that

regulatory capital is equivalent to a sustainable target level for tier 1 common equity and then allocate that approximation to the segments based on

economic capital.

Highlights

Linked quarter:

Commercial Banking net income increased $31 million, or 23%

Total revenue increased $37 million with solid improvement in

net interest income largely related to loan growth and higher

interest recoveries

Average loans up $2.2 billion; deposits up slightly

Loan growth driven by strength in Mid-corporate and

Industry Verticals, Commercial Real Estate, Corporate

Finance and Franchise Finance

Noninterest income increased $23 million, driven by strength in

capital markets and interest rate products

Noninterest expense was flat as higher salaries and employee

benefits related to a change in timing of merit and incentive

payments and higher insurance costs were offset by lower

outside services expense

Prior-year quarter:

Net income increased $29 million, or 21%

Net interest income was up $28 million, reflecting the benefit of a

$4.6 billion increase in average loans and leases, improved 

deposit spreads and a $2.4 billion increase in average deposits

Noninterest income increased $14 million, reflecting strength in

service charges and fees, including the benefit of Treasury

Solutions’ pricing initiatives and interest rate products and capital

markets fees

Noninterest expense increased $5

million as increased salaries

and employee benefits related to the timing of merit increases

and incentive payments and higher insurance costs were partially

offset by lower outside services costs.

2Q16 change from

$s in millions

2Q16

1Q16

2Q15

1Q16

2Q15

$

%

$

%

Net interest income

314

$     

300

$     

286

$     

14

$       

5

%

28

$       

10

%

Noninterest income

122

99

108

23

23

14

13

Total revenue

436

399

394

37

9

42

11

Noninterest expense

186

187

181

(1)

(1)

5

3

Pre-provision profit

250

212

213

38

18

37

17

Provision for credit losses

(1)

9

7

(10)

(111)

(8)

(114)

Income before income tax

expense

251

203

206

48

24

45

22

Income tax expense

87

70

71

17

24

16

23

Net income

164

$     

133

$     

135

$     

31

$       

23

%

29

$       

21

%

Average balances

$s in billions

Total loans and leases

(2)

46.1

$   

43.9

$   

41.5

$   

2.2

$      

5

%

4.6

$      

11

%

Total deposits

25.1

$   

24.8

$   

22.7

$   

0.3

$      

1

%

2.4

$      

11

%

Performance metrics

ROTCE

(1,3)

13.0%

11.2%

11.7%

185

bps

135

bps

Efficiency ratio

(1)

43%

47%

46%

(386)

bps

(319)

bps

2Q16 change from

$s in millions

2Q16

1Q16

2Q15

1Q16

2Q15

$

%

$

%

Net interest income

7

$         

23

$       

10

$       

(16)

$     

(70)

%

(3)

$        

(30)

%

Noninterest income

14

23

22

(9)

(39)

(8)

(36)

Total revenue

21

46

32

(25)

(54)

(11)

(34)

Noninterest expense

9

8

47

1

13

(38)

(81)

Pre-provision profit (loss)

12

38

(15)

(26)

(68)

27

180

Provision for credit losses

42

19

10

23

121

32

NM

Income (loss) before income

tax expense (benefit)

(30)

19

(25)

(49)

NM

(5)

(20)

Income tax expense (benefit)

(19)

—

(14)

(19)

NM

(5)

(36)

Net income (loss)

(11)

$     

19

$       

(11)

$     

(30)

$     

(158)

%

—

$       

—

%

Average balances

$s in billions

Total loans and leases

3.1

$      

3.0

$      

3.6

$      

0.1

$      

3

%

(0.5)

$    

(14)

%

Total deposits

7.0

$      

6.3

$      

5.9

$      

0.7

$      

12

%

1.2

$      

20

%

Other

31

Linked quarter:

Other recorded a net loss of $11 million  versus net income of

$19 million.  This decrease was largely driven by lower revenue

and higher provision for credit losses

Net interest income decreased $16 million, largely reflecting

higher borrowing costs related to term-debt issuance, lower

residual funds-transfer pricing, investment portfolio income and

non-core loan interest

Noninterest income decreased $9 million, largely reflecting lower

securities gains and higher securities impairment charges

Noninterest expense remained relatively stable

Provision for credit losses of $42 million included a $25 million

reserve build compared with $19 million of provision for credit

losses, which included an $8 million reserve build

Prior-year quarter:

Net loss was flat

Net interest income decreased $3 million

Noninterest income decreased $8 million

Noninterest expense down $38 million from 2Q15, which

included restructuring charges and special items

Provision for credit losses increased $32 million

Reflects $25 million reserve build versus a $1 million release

in the prior-year quarter

Highlights

B-

and

lower

24%

20%

16%

7%

8%

25%

1.8%

98.2%

23%

28%

20%

29%

Oil & Gas portfolio overview

Well-diversified portfolio with ~100 clients

Includes $335 million of corporate aircraft leases arising from

Asset Finance

Nonperforming loans down $15 million largely due to pay

downs on RBL portfolio

Existing RBL commitments declined by 17% due to 2Q16

borrowing base redeterminations and restructuring activity; a

new credit extension of ~$50 million partially offset these

reductions

Oil and gas portfolio loan loss reserves of $80 million as of

6/30/16

Reserves to total loans of more price-sensitive portfolios

now at 8.5%

(3)

, up from 6.3% in 1Q16

32

Highlights

Total loans outstanding

(2)

Oil & Gas

All other loans

1)

Includes Downstream, Integrated, and Midstream sub-categories.

2)

Portfolio balances, risk rating and industry sector stratifications as of June 30, 2016.

3)

Reserves/(More

price-sensitive

Oil

&

Gas

portfolio

outstandings

-

leases

secured

by

aircraft

($133

million)).

BBB+ to BBB-

BB+ to BB-

B+ to

B

23% investment grade

~$1.1 billion

more sensitive

to declining oil

prices

Midstream

Integrated

Downstream

Reserve-based

lending (RBL)

Upstream,

Non-RBL

Oil Field

Services

Oil & Gas portfolio

by Sub-sector

(2)

Oil & Gas portfolio

by Investment grade-equivalent risk rating

(2)

2Q16 Oil & Gas outstandings

$s in millions

Total

O/S

Utilized

%

Criticized

%

Nonaccrual

status

Less price-sensitive total

731

$       

64%

2%

0

$              

Upstream

295

66%

Oilfield Services

355

73%

Reserve-based lending (RBL)

425

65%

More price-sensitive total

1,075

68%

57%

195

Total Oil & Gas

1,806

$    

66%

35%

195

$          

Total Oil & Gas ex. Aircraft

1,471

$    

62%

43%

195

$          

Restructuring charges and special items

33

1)

These are non-GAAP financial measures. Please see Non-GAAP Reconciliation Tables in the Appendix for an explanation of our use of non-GAAP financial measures and their reconciliation to GAAP.

2Q16

1Q16

2Q15

1Q16

2Q15

$

%

$

%

Pre-tax restructuring charges and

special items

—

$           

—

$           

40

$           

—

$           

NM

%

(40)

$          

NM

%

After-tax restructuring charges and

special items

—

—

25

—

NM

(25)

NM

Diluted EPS impact

—

$           

—

$           

0.05

$        

—

$           

NM

%

(0.05)

$      

NM

%

$s in millions, except per share data

GAAP

results

included

restructuring

charges

and

special

items

related

to

enhancing

efficiencies

and

improving

processes

across

the

organization

and

separation

from

The

Royal

Bank

of

Scotland

Group

plc

(“RBS”).

2Q16 change from

Restructuring

charges

and

special

items

(1)

Non-GAAP financial measures

34

This document contains non-GAAP financial measures. The table below presents reconciliations of certain non-GAAP measures. These reconciliations exclude

restructuring charges and/or special items, which are included, where applicable, in the financial results presented in accordance with GAAP. Restructuring charges

and special items include expenses related to our efforts to improve processes and enhance efficiencies, as well as rebranding, separation from RBS and regulatory

expenses. 

The non-GAAP measures presented below include “noninterest income”, “total revenue”, “ noninterest expense”, “pre-provision profit”, “income before income tax

expense”, “income tax expense”, “net income”, “net income available to common stockholders”, “salaries and employee benefits”, “outside services”, “occupancy”,

“equipment expense”, “other operating expense”, “net income per average common share”, “return on average common equity”

and “return on average total

assets” . In addition, we present computations for "tangible book value per common share", “return on average tangible common equity”, “return on average total

tangible assets”, “efficiency ratio”, “pro forma Basel III fully phased-in common equity tier 1 capital”, “operating leverage”, “noninterest income before accounting

change” and “card fee income before accounting change” as part of our non-GAAP measures.

We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our

operating performance and make day-to-day operating decisions. In addition, we believe restructuring charges and special items in any period do not reflect the

operational performance of the business in that period and, accordingly, it is useful to consider these line items with and without restructuring charges and special

items. We believe this presentation also increases comparability of period-to-period results.

We also consider pro forma capital ratios defined by banking regulators but not effective at each period end to be non-GAAP financial measures. Since analysts and

banking regulators may assess our capital adequacy using these pro forma ratios, we believe they are useful to provide investors the ability to assess our capital

adequacy on the same basis.

Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our

non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-

GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools

and should not be considered in isolation or as a substitute for our results as reported under GAAP.

Non-GAAP financial measures and reconciliations

35

(Excluding restructuring charges and special items)

$s in millions, except per share data

2Q16

1Q16

4Q15

3Q15

2Q15

2016

2015

2015

2014

Noninterest income, excluding special items:

Noninterest income (GAAP)

$355

$330

$362

$353

$360

$685

$707

Less: Special items

—

—

—

—

—

—

—

Noninterest income, excluding special items (non-GAAP)

$355

$330

$362

$353

$360

$685

$707

Total revenue, excluding special items:

Total revenue (GAAP)

A

$1,278

$1,234

$1,232

$1,209

$1,200

$2,512

$2,383

$4,824

$4,979

Less: Special items

—

—

—

—

—

—

—

—

288 

Total revenue, excluding special items (non-GAAP)

B

$1,278

$1,234

$1,232

$1,209

$1,200

$2,512

$2,383

$4,824

$4,691

Noninterest expense, excluding restructuring charges and special items:

Noninterest expense (GAAP)

C

$827

$811

$810

$798

$841

$1,638

$1,651

$3,259

$3,392

Less: Restructuring charges and special items

—

—

—

—

40 

—

50 

50 

169 

Noninterest expense, excluding restructuring charges and special items (non-GAAP)

D

$827

$811

$810

$798

$801

$1,638

$1,601

$3,209

$3,223

Pre-provision profit, excluding restructuring charges and special items:

Total revenue, excluding restructuring charges and special items (non-GAAP)

$1,278

$1,234

$1,232

$1,209

$1,200

$2,512

$2,383

Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)

827 

811 

810 

798 

801 

1,638 

1,601 

Pre-provision profit, excluding restructuring charges and special items (non-GAAP)

$451

$423

$422

$411

$399

$874

$782

Income before income tax expense, excluding restructuring charges and special items:

Income before income tax expense (GAAP)

$361

$332

$331

$335

$282

$693

$597

Less: Income before income tax expense (benefit) related to restructuring charges and special items (GAAP)

—

—

—

—

(40)

—

(50)

Income before income tax expense, excluding restructuring charges and special items (non-GAAP)

$361

$332

$331

$335

$322

$693

$647

Income tax expense, excluding restructuring charges and special items:

Income tax expense (GAAP)

$118

$109

$110

$115

$92

$227

$198

Less: Income tax (benefit) related to restructuring charges and special items (GAAP)

—

—

—

—

(15)

—

(19)

Income tax expense, excluding restructuring charges and special items (non-GAAP)

$118

$109

$110

$115

$107

$227

$217

Net income, excluding restructuring charges and special items:

Net income (GAAP)

E

$243

$223

$221

$220

$190

$466

$399

Add: Restructuring charges and special items, net of income tax expense (benefit)

—

—

—

—

25 

—

31 

Net income, excluding restructuring charges and special items (non-GAAP)

F

$243

$223

$221

$220

$215

$466

$430

Net income available to common stockholders (GAAP),  excluding restructuring charges and special items:

Net income available to common stockholders (GAAP)

G

$243

$216

$221

$213

$190

$459

$399

Add: Restructuring charges and special items, net of income tax expense (benefit)

—

—

—

—

25 

—

31 

Net income available to common stockholders, excluding restructuring charges and special items (non-GAAP)

H

$243

$216

$221

$213

$215

$459

$430

Return on average common equity, excluding restructuring charges and special items:

Average common equity (GAAP)

I

$19,768

$19,567

$19,359

$19,261

$19,391

$19,667

$19,399

Return on average common equity, excluding restructuring charges and special items (non-GAAP)

H/I

4.94 %

4.45 %

4.51 %

4.40 %

4.45 %

4.70 %

4.47 %

Return on average tangible common equity and return on average tangible common equity, excluding restructuring

charges and special items:

Average common equity (GAAP)

I

$19,768

$19,567

$19,359

$19,261

$19,391

$19,667

$19,399

Less: Average goodwill (GAAP)

6,876

6,876

6,876

6,876

6,876

6,876

6,876

Less: Average other intangibles (GAAP)

2

3

3

4

5

2

5

Add: Average deferred tax liabilities related to goodwill (GAAP)

496

481

468

453

437

488

430

Average tangible common equity (non-GAAP)

J

$13,386

$13,169

$12,948

$12,834

$12,947

$13,277

$12,948

Return on average tangible common equity (non-GAAP)

G/J

7.30 %

6.61 %

6.75 %

6.60 %

5.90 %

6.96 %

6.21 %

Return on average tangible common equity, excluding restructuring charges and special items (non-GAAP)

H/J

7.30 %

6.61 %

6.75 %

6.60 %

6.67 %

6.96 %

6.70 %

QUARTERLY TRENDS

FOR THE YEAR

ENDED DECEMBER

ENDED JUNE 30,

FOR THE SIX MONTHS

Non-GAAP financial measures and reconciliations

36

(Excluding restructuring charges and special items)

$s in millions, except per share data

2Q16

1Q16

4Q15

3Q15

2Q15

2016

2015

2015

2014

Return on average total assets, excluding restructuring charges and special items:

Average total assets (GAAP)

K

$142,179

$138,780

$136,298

$135,103

$135,521

$140,479

$134,429

Return on average total assets, excluding restructuring charges and special items (non-GAAP)

F/K

0.69%

0.65%

0.64%

0.65%

0.64%

0.67%

0.65%

Return on average total tangible assets and return on average total tangible assets, excluding restructuring charges 

and special items:

Average total assets (GAAP)

K

$142,179

$138,780

$136,298

$135,103

$135,521

$140,479

$134,429

Less: Average goodwill (GAAP)

6,876

6,876

6,876

6,876

6,876

6,876

6,876

Less: Average other intangibles (GAAP)

2

3

3

4

5

2

5

Add: Average deferred tax liabilities related to goodwill (GAAP)

496

481

468

453

437

488

430

Average tangible assets (non-GAAP)

L

$135,797

$132,382

$129,887

$128,676

$129,077

$134,089

$127,978

Return on average total tangible assets (non-GAAP)

E/L

0.72%

0.68%

0.67%

0.68%

0.59%

0.70%

0.63%

Return on average total tangible assets, excluding restructuring charges and special items (non-GAAP)

F/L

0.72%

0.68%

0.67%

0.68%

0.67%

0.70%

0.68%

Efficiency ratio and efficiency ratio, excluding restructuring charges and special items:

Efficiency ratio (non-GAAP)

C/A

64.71%

65.66%

65.76%

66.02%

70.02%

65.18%

69.27%

67.56%

68.12%

Efficiency ratio, excluding restructuring charges and special items (non-GAAP)

D/B

64.71%

65.66%

65.76%

66.02%

66.70%

65.18%

67.17%

66.52%

68.70%

Tangible book value per common share:

Common shares -

at end of period (GAAP)

M

529,094,976 

528,933,727 

527,774,428 

527,636,510 

537,149,717 

529,094,976 

537,149,717 

Common stockholders' equity (GAAP)

$19,979

$19,718

$19,399

$19,353

$19,339

$19,979

$19,339

Less: Goodwill (GAAP)

6,876 

6,876 

6,876 

6,876 

6,876 

6,876 

6,876 

Less: Other intangible assets (GAAP)

2 

3 

3 

3 

4 

2 

4 

Add: Deferred tax liabilities related to goodwill (GAAP)

507 

494 

480 

465 

450 

507 

450 

Tangible common equity (non-GAAP)

N

$13,608

$13,333

$13,000

$12,939

$12,909

$13,608

$12,909

Tangible book value per common share (non-GAAP)

N/M

$25.72

$25.21

$24.63

$24.52

$24.03

$25.72

$24.03

Net income per average common share -

basic and diluted, excluding restructuring charges and special items:

Average

common

shares

outstanding

-

basic

(GAAP)

O

528,968,330 

528,070,648 

527,648,630 

530,985,255 

537,729,248 

528,519,489 

541,986,653 

Average

common

shares

outstanding

-

diluted

(GAAP)

P

530,365,203 

530,446,188 

530,275,673 

533,398,158 

539,909,366 

530,396,871 

544,804,268 

Net income available to common stockholders (GAAP)

G

$243

$216

$221

$213

$190

$459

$399

Net

income

per

average

common

share

-

basic

(GAAP)

G/O

0.46

0.41

0.42

0.40

0.35

0.87

0.74

Net

income

per

average

common

share

-

diluted

(GAAP)

G/P

0.46

0.41

0.42

0.40

0.35

0.87

0.73

Net income available to common stockholders, excluding restructuring charges and special items (non-GAAP)

H

243 

216 

221 

213 

215 

459 

430 

Net income per average common share -

basic, excluding restructuring charges and special items (non-GAAP)

H/O

0.46

0.41

0.42

0.40

0.40

0.87

0.79

Net income per average common share -

diluted, excluding restructuring charges and special items (non-GAAP)

H/P

0.46

0.41

0.42

0.40

0.40

0.87

0.79

QUARTERLY TRENDS

FOR THE YEAR

ENDED DECEMBER

FOR THE SIX MONTHS

ENDED JUNE 30,

Non-GAAP financial measures and reconciliations

37

(Excluding restructuring charges and special items)

$s in millions, except per share data

2Q16

1Q16

4Q15

3Q15

2Q15

2016

2015

Pro

forma

Basel

III

fully

phased-in

common

equity

tier

1

capital

ratio

1

:

Common equity tier 1 (regulatory)

$13,768

$13,570

$13,389

$13,200

$13,270

Less: Change in DTA and other threshold deductions (GAAP)

1 

1 

2 

2 

3 

Pro forma Basel III fully phased-in common equity tier 1 (non-GAAP)

Q

$13,767

$13,569

$13,387

$13,198

$13,267

Risk-weighted assets (regulatory general risk weight approach)

$119,492

$116,591

$114,084

$112,277

$112,131

Add: Net change in credit and other risk-weighted assets (regulatory)

228 

232 

244 

243 

247 

Basel III standardized approach risk-weighted assets (non-GAAP)

R

$119,720

$116,823

$114,328

$112,520

$112,378

Pro

forma

Basel

III

fully

phased-in

common

equity

tier

1

capital

ratio

(non-GAAP)

1

Q/R

11.5%

11.6%

11.7%

11.7%

11.8%

Salaries and employee benefits, excluding restructuring charges and special items:

Salaries and employee benefits (GAAP)

$432

$425

$402

$404

$411

$857

$830

Less: Restructuring charges and special items

—

—

(2)

—

6 

—

5 

Salaries and employee benefits, excluding restructuring charges and special items (non-GAAP)

$432

$425

$404

$404

$405

$857

$825

Outside services, excluding restructuring charges and special items:

Outside services (GAAP)

$86

$91

$104

$89

$99

$177

$178

Less: Restructuring charges and special items

—

—

2 

—

16 

—

24 

Outside services, excluding restructuring charges and special items (non-GAAP)

$86

$91

$102

$89

$83

$177

$154

Occupancy, excluding restructuring charges and special items:

Occupancy (GAAP)

$76

$76

$74

$75

$90

$152

$170

Less: Restructuring charges and special items

—

—

—

—

15 

—

17 

Occupancy, excluding restructuring charges and special items (non-GAAP)

$76

$76

$74

$75

$75

$152

$153

Equipment expense, excluding restructuring charges and special items:

Equipment expense (GAAP)

$64

$65

$67

$62

$65

$129

$128

Less: Restructuring charges and special items

—

—

—

—

—

—

1 

Equipment expense, excluding restructuring charges and special items (non-GAAP)

$64

$65

$67

$62

$65

$129

$127

Other operating expense, excluding restructuring charges and special items:

Other operating expense (GAAP)

$128

$115

$125

$133

$139

$243

$272

Less: Restructuring charges and special items

—

—

—

—

3 

—

3 

Other operating expense, excluding restructuring charges and special items (non-GAAP)

$128

$115

$125

$133

$136

$243

$269

Restructuring charges and special expense items include:

Restructuring charges

$0

$0

$0

$0

$25

$0

$26

Special items

—

—

—

—

15 

—

24 

Restructuring charges and special expense items before income tax expense

$0

$0

$0

$0

$40

$0

$50

2Q16 vs 1Q16

2Q16 vs 2Q15

$ Change

$ Change

Noninterest income:

Noninterest income (GAAP)

$355

$360

($5)

(1)%

Add: Reward accounting change

10 

—

10 

NM

Noninterest income, before accounting change (non-GAAP)

$365

$360

$5

1%

1) Basel III ratios assume certain definitions impacting qualifying Basel III capital, which otherwise will phase in through 2019, are fully phased-in. Ratios also reflect the required US Standardized methodology for calculating RWAs, effective January 1, 2015.

QUARTERLY TRENDS

FOR THE SIX MONTHS

ENDED JUNE 30,

Non-GAAP financial measures and reconciliations

38

(Excluding restructuring charges and special items)

$s in millions

2Q16 vs 1Q16

2Q16 vs 2Q15

2Q16

1Q16

4Q15

3Q15

2Q15

2016

2015

% Change

% Change

Operating leverage:

Total revenue (GAAP)

A

$1,278

$1,234

$1,200

$2,512

$2,383

3.6%

6.5%

Noninterest expense (GAAP)

C

$827

$811

$841

$1,638

$1,651

2.0%

(1.7)%

Operating leverage (non-GAAP)

1.6%

8.2%

Operating leverage, excluding restructuring charges and special items:

Total revenue, excluding restructuring charges and special items (non-GAAP)

B

$1,278

$1,234

$1,200

$2,512

$2,383

3.6%

6.5%

Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)

D

$827

$811

$801

$1,638

$1,601

2.0%

3.2%

Operating leverage, excluding restructuring charges and special items: (non-GAAP)

1.6%

3.3%

1H16 vs 1H15

2H15 vs 2H14

1H15 vs 1H14

1H14

2H14

1H15

2H15

1H16

% Change

% Change

% Change

Operating leverage:

Total revenue (GAAP)

$2,639

$2,340

$2,383

$2,441

$2,512

5.4%

4.3%

(9.7)%

Noninterest expense (GAAP)

$1,758

$1,634

$1,651

$1,608

$1,638

(0.8)%

(1.6)%

(6.1)%

Operating leverage (non-GAAP)

6.2%

5.9%

(3.6)%

Operating leverage, excluding restructuring charges and special items:

Total revenue, excluding restructuring charges and special items (non-GAAP)

$2,351

$2,340

$2,383

$2,441

$2,512

5.4%

4.3%

1.4%

Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)

$1,643

$1,579

$1,601

$1,608

$1,638

2.3%

1.8%

(2.6)%

Operating leverage, excluding restructuring charges and special items: (non-GAAP)

3.1%

2.5%

3.9%

HALF YEAR TRENDS

QUARTERLY TRENDS

FOR THE SIX MONTHS

ENDED JUNE 30,

$55,116

$45,304

$31,962

$132,382

$54,065

$43,835

$31,987

$129,887

Return on average total tangible assets (non-GAAP)

A/D

0.65%

1.39%

NM

0.72%

0.52%

1.18%

NM

0.68%

0.49%

1.37%

NM

0.67%

Efficiency ratio:

Noninterest expense (GAAP)

E

$632

$186

$9

$827

$616

$187

$8

$811

$624

$180

$6

$810

Net interest income (GAAP)

602

314

7

923

581

300

23

904

565

301

4

870

Noninterest income (GAAP)

219

122

14

355

208

99

23

330

226

107

29

362

Total revenue

F

$821

$436

$21

$1,278

$789

$399

$46

$1,234

$791

$408

$33

$1,232

Efficiency ratio (non-GAAP)

E/F

76.98%

42.88%

NM

64.71%

78.08%

46.74%

NM

65.66%

78.85%

44.02%

NM

65.76%

Consumer

Banking

Commercial

Banking

Other

Consolidated

Consumer

Banking

Commercial

Banking

Other

Consolidated

Net income available to common stockholders:

Net income (loss) (GAAP)

A

$68

$145

$7

$220

$66

$135

($11)

$190

Less: Preferred stock dividends

—

—

7

7

—

—

—

—

Net income available to common stockholders

B

$68

$145

$—

$213

$66

$135

($11)

$190

Return on average tangible common equity:

Average common equity (GAAP)

$4,791

$4,722

$9,748

$19,261

$4,681

$4,625

$10,085

$19,391

Less: Average goodwill (GAAP)

—

—

6,876

6,876

—

—

6,876

6,876

Average other intangibles (GAAP)

—

—

4

4

—

—

5

5

Add: Average deferred tax liabilities related to goodwill (GAAP)

—

—

453

453

—

—

437

437

Average tangible common equity (non-GAAP)

C

$4,791

$4,722

$3,321

$12,834

$4,681

$4,625

$3,641

$12,947

Return on average tangible common equity (non-GAAP):

B/C

5.67%

12.24%

NM

6.60%

5.66%

11.69%

NM

5.90%

Return on average total tangible assets:

Average total assets (GAAP)

$53,206

$43,113

$38,784

$135,103

$52,489

$42,617

$40,415

$135,521

Non-GAAP

financial

measures

and

reconciliations

–

segments

39

$s in millions

Consumer

Banking

Commercial

Banking

Other

Consolidated

Consumer

Banking

Commercial

Banking

Other

Consolidated

Consumer

Banking

Commercial

Banking

Other

Consolidated

Net income available to common stockholders:

Net income (loss) (GAAP)

A

$90

$164

($11)

$243

$71

$133

$19

$223

$67

$152

$2

$221

Less: Preferred stock dividends

—

—

—

—

—

—

7

7

—

—

—

—

Net income available to common stockholders

B

$90

$164

($11)

$243

$71

$133

$12

$216

$67

$152

$2

$221

Return on average tangible common equity:

Average common equity (GAAP)

$5,110

$5,040

$9,618

$19,768

$5,089

$4,790

$9,688

$19,567

$4,831

$4,787

$9,741

$19,359

Less: Average goodwill (GAAP)

—

—

6,876

6,876

—

—

6,876

6,876

—

—

6,876

6,876

Average other intangibles (GAAP)

—

—

2

2

—

—

3

3

—

—

3

3

Add: Average deferred tax liabilities related to goodwill (GAAP)

—

—

496

496

—

—

481

481

—

—

468

468

Average tangible common equity (non-GAAP)

C

$5,110

$5,040

$3,236

$13,386

$5,089

$4,790

$3,290

$13,169

$4,831

$4,787

$3,330

$12,948

Return on average tangible common equity (non-GAAP):

B/C

7.09%

13.04%

NM

7.30%

5.59%

11.19%

NM

6.61%

5.50%

12.57%

NM

6.75%

Return on average total tangible assets:

Average total assets (GAAP)

$55,660

$47,388

$39,131

$142,179

$55,116

$45,304

$38,360

$138,780

$54,065

$43,835

$38,398

$136,298

Less: Average goodwill (GAAP)

—

—

6,876

6,876

—

—

6,876

6,876

—

—

6,876

6,876

Average other intangibles (GAAP)

—

—

2

2

—

—

3

3

—

—

3

3

Add: Average deferred tax liabilities related to goodwill (GAAP)

—

—

496

496

—

—

481

481

—

—

468

468

Average tangible assets (non-GAAP)

D

$55,660

$47,388

$32,749

$135,797

Less: Average goodwill (GAAP)

—

—

6,876

6,876

—

—

6,876

6,876

Average other intangibles (GAAP)

—

—

4

4

—

—

5

5

Add: Average deferred tax liabilities related to goodwill (GAAP)

—

—

453

453

—

—

437

437

Average tangible assets (non-GAAP)

D

$53,206

$43,113

$32,357

$128,676

$52,489

$42,617

$33,971

$129,077

Return on average total tangible assets (non-GAAP)

A/D

0.51%

1.34%

NM

0.68%

0.51%

1.27%

NM

0.59%

Efficiency ratio:

Noninterest expense (GAAP)

E

$623

$175

$—

$798

$613

$181

$47

$841

Net interest income (GAAP)

556

299

1

856

544

286

10

840

Noninterest income (GAAP)

235

100

18

353

230

108

22

360

Total revenue

F

$791

$399

$19

$1,209

$774

$394

$32

$1,200

Efficiency ratio (non-GAAP)

E/F

78.72%

43.75%

NM

66.02%

79.25%

46.07%

NM

70.02%

2015

2015

THREE MONTHS ENDED JUNE 30,

THREE MONTHS ENDED MARCH 31,

THREE MONTHS ENDED SEPTEMBER 30,

THREE MONTHS ENDED JUNE 30,

THREE MONTHS ENDED DECEMBER 31,

2016

2016

2015

Non-GAAP

financial

measures

and

reconciliations

–

segments

40

$s in millions

Consumer

Banking

Commercial

Banking

Other

Consolidated

Consumer

Banking

Commercial

Banking

Other

Consolidated

Net income available to common stockholders:

Net income (loss) (GAAP)

A

$161

$297

$8

$466

$127

$282

($10)

$399

Less: Preferred stock dividends

—

—

—

—

—

—

—

—

Net income available to common stockholders

B

$161

$297

$8

$466

$127

$282

($10)

$399

Return on average tangible common equity:

Average common equity (GAAP)

$5,099

$4,915

$9,653

$19,667

$4,665

$4,576

$10,158

$19,399

Less: Average goodwill (GAAP)

—

—

6,876

6,876

—

—

6,876

6,876

Average other intangibles (GAAP)

—

—

2

2

—

—

5

5

Add: Average deferred tax liabilities  related to goodwill (GAAP)

—

—

488

488

—

—

430

430

Average tangible common equity (non-GAAP)

C

$5,099

$4,915

$3,263

$13,277

$4,665

$4,576

$3,707

$12,948

Return on average tangible common equity (non-GAAP)

B/C

6.34%

12.14%

NM

6.96%

5.48%

12.41%

NM

6.21%

Return on average total tangible assets:

Average total assets (GAAP)

$55,388

$46,346

$38,745

$140,479

$52,048

$42,114

$40,267

$134,429

Less: Average goodwill (GAAP)

—

—

6,876

6,876

—

—

6,876

6,876

Average other intangibles (GAAP)

—

—

2

2

—

—

5

5

Add: Average deferred tax liabilities related to goodwill (GAAP)

—

—

488

488

—

—

430

430

Average tangible assets (non-GAAP)

D

$55,388

$46,346

$32,355

$134,089

$52,048

$42,114

$33,816

$127,978

Return on average total tangible assets (non-GAAP)

A/D

0.58%

1.29%

NM

0.70%

0.49%

1.35%

NM

0.63%

Efficiency ratio:

Noninterest expense (GAAP)

E

$1,248

$373

$17

$1,638

$1,209

$354

$88

$1,651

Net interest income (GAAP)

1,183

614

30

1,827

1,077

562

37

1,676

Noninterest income (GAAP)

427

221

37

685

449

208

50

707

Total revenue

F

$1,610

$835

$67

$2,512

$1,526

$770

$87

$2,383

Efficiency ratio (non-GAAP)

E/F

77.52%

44.73%

NM

65.18%

79.25%

46.04%

NM

69.27%

FOR SIX MONTHS ENDED JUNE 30,

2016

2015

41

EX-99.3

Exhibit 99.3

Citizens Financial Group, Inc.

Financial Supplement

Second Quarter 2016

Table of Contents	Page
Consolidated Financial Highlights		3
Consolidated Statements of Operations (unaudited)		5
Consolidated Balance Sheets (unaudited)		6
Loans and Deposits		7
Average Balance Sheets and Annualized Yields		8
Segment Financial Highlights		10
Credit-Related Information
Credit Exposure		21
Nonperforming Assets		22
Charge-offs, Recoveries and Related Ratios		23
Summary of Changes in the Allowances		25
Allowance Components		26
Capital and Ratios		27
Per-Share Related Information		28
Non-GAAP Financial Measures and Reconciliations		29
Forward-Looking Statements		36

2

CONSOLIDATED FINANCIAL HIGHLIGHTS

(dollars in millions, except per share and ratio data)

	QUARTERLY TRENDS																								FOR THE SIX MONTHS ENDED JUNE 30,
													2Q16 Change																	2016 Change
	2Q16			1Q16		4Q15		3Q15		2Q15			1Q16						2Q15						2016		2015			2015
													$			%			$			%								$			%
SELECTED OPERATING DATA
Total revenue	$	1,278		$	1,234	$	1,232	$	1,209	$	1,200		$	44			4	%	$	78			7	%	$	2,512	$	2,383		$	129			5	%
Noninterest expense		827			811		810		798		841			16			2			(14	)		(2	)		1,638		1,651			(13	)		(1	)
Profit before provision for credit losses		451			423		422		411		359			28			7			92			26			874		732			142			19
Provision for credit losses		90			91		91		76		77			(1	)		(1	)		13			17			181		135			46			34
NET INCOME		243			223		221		220		190			20			9			53			28			466		399			67			17
Net income, excluding restructuring charges and special items1		243			223		221		220		215			20			9			28			13			466		430			36			8
Net income available to common stockholders		243			216		221		213		190			27			13			53			28			459		399			60			15
Net income available to common stockholders, excluding restructuring charges and special items1		243			216		221		213		215			27			13			28			13			459		430			29			7
PER COMMON SHARE DATA
Basic earnings	$	0.46		$	0.41	$	0.42	$	0.40	$	0.35		$	0.05			12	%	$	0.11			31	%	$	0.87	$	0.74		$	0.13			18	%
Diluted earnings		0.46			0.41		0.42		0.40		0.35			0.05			12			0.11			31			0.87		0.73			0.14			19
Basic earnings, excluding restructuring charges and special items1		0.46			0.41		0.42		0.40		0.40			0.05			12			0.06			15			0.87		0.79			0.08			10
Diluted earnings, excluding restructuring charges and special items1		0.46			0.41		0.42		0.40		0.40			0.05			12			0.06			15			0.87		0.79			0.08			10
Cash dividends declared and paid per share		0.12			0.10		0.10		0.10		0.10			0.02			20			0.02			20			0.22		0.20			0.02			10
Book value		37.76			37.28		36.76		36.68		36.00			0.48			1			1.76			5			37.76		36.00			1.76			5
Tangible book value1		25.72			25.21		24.63		24.52		24.03			0.51			2			1.69			7			25.72		24.03			1.69			7
COMMON SHARES OUTSTANDING
Average: Basic		528,968,330			528,070,648		527,648,630		530,985,255		537,729,248			897,682			—	%		(8,760,918	)		(2	%)		528,519,489		541,986,653			(13,467,164	)		(2	%)
Diluted		530,365,203			530,446,188		530,275,673		533,398,158		539,909,366			(80,985	)		—			(9,544,163	)		(2	)		530,396,871		544,804,268			(14,407,397	)		(3	)
Common shares at period-end		529,094,976			528,933,727		527,774,428		527,636,510		537,149,717			161,249			—			(8,054,741	)		(1	)		529,094,976		537,149,717			(8,054,741	)		(1	)
Closing share price	$	19.98		$	20.95	$	26.19	$	23.86	$	27.31		($	0.97	)		(5	)	($	7.33	)		(27	)	$	19.98	$	27.31		($	7.33	)		(27	)
Market capitalization		10,571			11,081		13,822		12,589		14,670			(510	)		(5	)		(4,099	)		(28	)		10,571		14,670			(4,099	)		(28	)
SEGMENT NET INCOME
Consumer Banking	$	90		$	71	$	67	$	68	$	66		$	19			27	%	$	24			36	%	$	161	$	127		$	34			27	%
Commercial Banking		164			133		152		145		135			31			23			29			21			297		282			15			5
Other		(11	)		19		2		7		(11	)		(30	)		(158	)		—			—			8		(10	)		18			(180	)
NET INCOME	$	243		$	223	$	221	$	220	$	190		$	20			9	%	$	53			28	%	$	466	$	399		$	67			17	%

¹ These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

3

CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED

(dollars in millions, except ratio and headcount data)

	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
FINANCIAL RATIOS
Net interest margin		2.84	%		2.86	%		2.77	%		2.76	%		2.72	%		(2	) bps					12	bps					2.85	%		2.74	%		11	bps
Return on average common equity		4.94			4.45			4.51			4.40			3.94			49	bps					100	bps					4.70			4.15			55	bps
Return on average common equity, excluding restructuring charges and special items1		4.94			4.45			4.51			4.40			4.45			49	bps					49	bps					4.70			4.47			23	bps
Return on average tangible common equity1		7.30			6.61			6.75			6.60			5.90			69	bps					140	bps					6.96			6.21			75	bps
Return on average tangible common equity, excluding restructuring and special items1		7.30			6.61			6.75			6.60			6.67			69	bps					63	bps					6.96			6.70			26	bps
Return on average total assets		0.69			0.65			0.64			0.65			0.56			4	bps					13	bps					0.67			0.60			7	bps
Return on average total assets, excluding restructuring charges and special items1		0.69			0.65			0.64			0.65			0.64			4	bps					5	bps					0.67			0.65			2	bps
Return on average total tangible assets1		0.72			0.68			0.67			0.68			0.59			4	bps					13	bps					0.70			0.63			7	bps
Return on average total tangible assets, excluding restructuring and special items1		0.72			0.68			0.67			0.68			0.67			4	bps					5	bps					0.70			0.68			2	bps
Effective income tax rate		32.61			32.87			33.45			34.12			32.69			(26	) bps					(8	) bps					32.73			33.21			(48	) bps
Efficiency ratio1		64.71			65.66			65.76			66.02			70.02			(95	) bps					(531	) bps					65.18			69.27			(409	) bps
Efficiency ratio, excluding restructuring and special items1		64.71			65.66			65.76			66.02			66.70			(95	) bps					(199	) bps					65.18			67.17			(199	) bps
CAPITAL RATIOS - PERIOD END (PRELIMINARY)2
CET1 capital ratio		11.5	%		11.6	%		11.7	%		11.8	%		11.8	%
Tier 1 capital ratio		11.7			11.9			12.0			12.0			12.1
Total capital ratio		14.9			15.1			15.3			15.4			15.3
Tier 1 leverage ratio		10.3			10.4			10.5			10.4			10.4
SELECTED BALANCE SHEET DATA (PERIOD END)
Total assets	$	145,183		$	140,077		$	138,208		$	135,447		$	137,251		$	5,106			4	%	$	7,932			6	%	$	145,183		$	137,251		$	7,932			6	%
Loans and leases:
Commercial		49,557			47,972			46,214			45,269			45,068			1,585			3			4,489			10			49,557			45,068			4,489			10
Retail		53,994			53,019			52,828			52,162			51,470			975			2			2,524			5			53,994			51,470			2,524			5
Total loans and leases		103,551			100,991			99,042			97,431			96,538			2,560			3			7,013			7			103,551			96,538			7,013			7
Deposits	$	106,257		$	102,606		$	102,539		$	101,866		$	100,615		$	3,651			4		$	5,642			6		$	106,257		$	100,615		$	5,642			6
Long-term borrowed funds		11,810			10,035			9,886			4,153			3,890			1,775			18			7,920			204			11,810			3,890			7,920			204
Total stockholders’ equity		20,226			19,965			19,646			19,600			19,586			261			1			640			3			20,226			19,586			640			3
Loans-to-deposits ratio (period-end balances)3		98.25	%		99.16	%		96.94	%		96.06	%		96.64	%		(91	) bps					161	bps					98.25	%		96.64	%		161	bps
Loans-to-deposits ratio (average balances)3		99.52			98.66			97.21			96.29			97.49			86	bps					203	bps					99.10			98.02			108	bps
Full-time equivalent colleagues		17,828			17,902			17,714			17,817			17,903			(74	)		—	%		(75	)		—	%		17,828			17,903			(75	)		—	%

¹ These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

² Basel III transitional rules for institutions applying the standardized approach to calculating risk-weighted assets became effective January 1, 2015. The capital ratios and associated components are prepared using the Basel III standardized transitional approach.

³ Ratios include loans and leases held for sale.

4

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(dollars in millions)

	QUARTERLY TRENDS																						FOR THE SIX MONTHS ENDED JUNE 30,
											2Q16																2016 Change
	2Q16		1Q16		4Q15		3Q15		2Q15		1Q16						2Q15						2016		2015		2015
											$			%			$			%							$			%
INTEREST INCOME:
Interest and fees on loans and leases	$	896	$	868	$	830	$	812	$	790	$	28			3	%	$	106			13	%	$	1,764	$	1,569	$	195			12	%
Interest and fees on loans held for sale		3		3		2		3		3		—			—			—			—			6		3		3			100
Interest and fees on other loans held for sale		4		1		—		3		3		3			NM			1			33			5		6		(1	)		(17	)
Investment securities		141		145		153		154		155		(4	)		(3	)		(14	)		(9	)		286		314		(28	)		(9	)
Interest-bearing deposits in banks		2		2		1		2		1		—			—			1			100			4		2		2			100
Total interest income		1,046		1,019		986		974		952		27			3			94			10			2,065		1,894		171			9
INTEREST EXPENSE:
Deposits		63		60		60		65		60		3			5			3			5			123		112		11			10
Federal funds purchased and securities sold under agreements to repurchase		—		1		3		4		2		(1	)		(100	)		(2	)		(100	)		1		9		(8	)		(89	)
Other short-term borrowed funds		12		11		16		17		19		1			9			(7	)		(37	)		23		34		(11	)		(32	)
Long-term borrowed funds		48		43		37		32		31		5			12			17			55			91		63		28			44
Total interest expense		123		115		116		118		112		8			7			11			10			238		218		20			9
Net interest income		923		904		870		856		840		19			2			83			10			1,827		1,676		151			9
NONINTEREST INCOME:
Service charges and fees		150		144		156		145		139		6			4			11			8			294		274		20			7
Card fees		51		50		60		60		60		1			2			(9	)		(15	)		101		112		(11	)		(10	)
Trust and investment services fees		38		37		39		41		41		1			3			(3	)		(7	)		75		77		(2	)		(3	)
Capital markets fees		35		22		15		21		30		13			59			5			17			57		52		5			10
Foreign exchange and letter of credit fees		21		21		23		22		22		—			—			(1	)		(5	)		42		45		(3	)		(7	)
Mortgage banking fees		25		18		20		18		30		7			39			(5	)		(17	)		43		63		(20	)		(32	)
Bank-owned life insurance income		13		13		16		14		14		—			—			(1	)		(7	)		26		26		—			—
Securities gains, net		4		9		10		2		9		(5	)		(56	)		(5	)		(56	)		13		17		(4	)		(24	)
Other income		18		16		23		30		15		2			13			3			20			34		41		(7	)		(17	)
Total noninterest income		355		330		362		353		360		25			8			(5	)		(1	)		685		707		(22	)		(3	)
TOTAL REVENUE		1,278		1,234		1,232		1,209		1,200		44			4			78			7			2,512		2,383		129			5
Provision for credit losses		90		91		91		76		77		(1	)		(1	)		13			17			181		135		46			34
NONINTEREST EXPENSE:
Salaries and employee benefits		432		425		402		404		411		7			2			21			5			857		830		27			3
Outside services		86		91		104		89		99		(5	)		(5	)		(13	)		(13	)		177		178		(1	)		(1	)
Occupancy		76		76		74		75		90		—			—			(14	)		(16	)		152		170		(18	)		(11	)
Equipment expense		64		65		67		62		65		(1	)		(2	)		(1	)		(2	)		129		128		1			1
Amortization of software		41		39		38		35		37		2			5			4			11			80		73		7			10
Other operating expense		128		115		125		133		139		13			11			(11	)		(8	)		243		272		(29	)		(11	)
Total noninterest expense		827		811		810		798		841		16			2			(14	)		(2	)		1,638		1,651		(13	)		(1	)
Income before income tax expense		361		332		331		335		282		29			9			79			28			693		597		96			16
Income tax expense		118		109		110		115		92		9			8			26			28			227		198		29			15
NET INCOME	$	243	$	223	$	221	$	220	$	190	$	20			9	%	$	53			28	%	$	466	$	399	$	67			17	%
Net income, excluding restructuring charges and special items1	$	243	$	223	$	221	$	220	$	215	$	20			9	%	$	28			13	%	$	466	$	430	$	36			8	%
Net income available to common stockholders	$	243	$	216	$	221	$	213	$	190	$	27			13	%	$	53			28	%	$	459	$	399	$	60			15	%
Net income available to common stockholders, excluding restructuring charges and special items1	$	243	$	216	$	221	$	213	$	215	$	27			13	%	$	28			13	%	$	459	$	430	$	29			7	%

¹ These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35

5

CONSOLIDATED BALANCE SHEETS (unaudited)

(dollars in millions)

PERIOD END BALANCES	AS OF															JUNE 30, 2016 CHANGE
	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015			Mar 31, 2016						June 30, 2015
																$			%			$			%
ASSETS:
Cash and due from banks	$	976		$	839		$	1,099		$	1,067		$	961		$	137			16	%	$	15			2	%
Interest-bearing cash and due from banks		2,679			1,016			1,986			689			1,908			1,663			164			771			40
Interest-bearing deposits in banks		727			534			356			363			186			193			36			541			NM
Securities available for sale, at fair value		18,479			17,964			17,884			18,197			18,662			515			3			(183	)		(1	)
Securities held to maturity		4,973			5,129			5,258			5,285			5,567			(156	)		(3	)		(594	)		(11	)
Other investment securities, at fair value		73			68			70			50			44			5			7			29			66
Other investment securities, at cost		873			896			863			822			861			(23	)		(3	)		12			1
Loans held for sale, at fair value		478			365			325			369			397			113			31			81			20
Other loans held for sale		372			386			40			51			300			(14	)		(4	)		72			24
Loans and leases		103,551			100,991			99,042			97,431			96,538			2,560			3			7,013			7
Less: Allowance for loan and lease losses		(1,246	)		(1,224	)		(1,216	)		(1,201	)		(1,201	)		(22	)		2			(45	)		4
Net loans and leases		102,305			99,767			97,826			96,230			95,337			2,538			3			6,968			7
Derivative assets		1,312			1,068			625			838			665			244			23			647			97
Premises and equipment		551			570			595			560			580			(19	)		(3	)		(29	)		(5	)
Bank-owned life insurance		1,587			1,576			1,564			1,553			1,543			11			1			44			3
Goodwill		6,876			6,876			6,876			6,876			6,876			—			—			—			—
Due from broker		132			161			—			—			939			(29	)		(18	)		(807	)		(86	)
Other assets		2,790			2,862			2,841			2,497			2,425			(72	)		(3	)		365			15
TOTAL ASSETS	$	145,183		$	140,077		$	138,208		$	135,447		$	137,251		$	5,106			4	%	$	7,932			6	%
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Deposits:
Noninterest-bearing	$	27,108		$	27,186		$	27,649		$	27,373		$	26,678		($	78	)		—	%	$	430			2	%
Interest-bearing		79,149			75,420			74,890			74,493			73,937			3,729			5			5,212			7
Total deposits		106,257			102,606			102,539			101,866			100,615			3,651			4			5,642			6
Federal funds purchased and securities sold under agreements to repurchase		717			714			802			1,293			3,784			3			—			(3,067	)		(81	)
Other short-term borrowed funds		2,770			3,300			2,630			5,861			6,762			(530	)		(16	)		(3,992	)		(59	)
Derivative liabilities		1,010			832			485			641			556			178			21			454			82
Deferred taxes, net		961			852			730			637			558			109			13			403			72
Long-term borrowed funds		11,810			10,035			9,886			4,153			3,890			1,775			18			7,920			204
Due to broker		86			276			—			—			—			(190	)		(69	)		86			NM
Other liabilities		1,346			1,497			1,490			1,396			1,500			(151	)		(10	)		(154	)		(10	)
TOTAL LIABILITIES		124,957			120,112			118,562			115,847			117,665			4,845			4			7,292			6
STOCKHOLDERS’ EQUITY:
Preferred stock:
$25.00 par value, 100,000,000 shares authorized		247			247			247			247			247			—			—			—			—
Common stock:
$0.01 par value, 1,000,000,000 shares authorized for each of the periods presented		6			6			6			6			6			—			—			—			—
Additional paid-in capital		18,735			18,730			18,725			18,718			18,714			5			—			21			—
Retained earnings		2,255			2,076			1,913			1,745			1,585			163			8			628			40
Treasury stock, at cost		(858	)		(858	)		(858	)		(857	)		(607	)		—			—			(251	)		41
Accumulated other comprehensive loss		(159	)		(236	)		(387	)		(259	)		(359	)		77			(33	)		200			(56	)
TOTAL STOCKHOLDERS’ EQUITY		20,226			19,965			19,646			19,600			19,586			261			1			640			3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	145,183		$	140,077		$	138,208		$	135,447		$	137,251		$	5,106			4	%	$	7,932			6	%
Memo: Total tangible common equity1	$	13,608		$	13,333		$	13,000		$	12,939		$	12,909		$	275			2	%	$	699			5	%

¹ This is a non-GAAP financial measure. For further information on this measure, refer to page 31.

6

LOANS AND DEPOSITS

(dollars in millions)

PERIOD END BALANCES	AS OF										JUNE 30, 2016 CHANGE
	June 30, 2016		Mar 31, 2016		Dec 31, 2015		Sept 30, 2015		June 30, 2015		Mar 31, 2016						June 30, 2015
											$			%			$			%
LOANS AND LEASES:
Commercial	$	35,927	$	34,671	$	33,264	$	32,726	$	33,027	$	1,256			4	%	$	2,900			9	%
Commercial real estate		9,825		9,406		8,971		8,678		8,157		419			4			1,668			20
Leases		3,805		3,895		3,979		3,865		3,884		(90	)		(2	)		(79	)		(2	)
Total commercial		49,557		47,972		46,214		45,269		45,068		1,585			3			4,489			10
Residential mortgages		13,855		13,345		13,318		12,792		12,253		510			4			1,602			13
Home equity loans		2,177		2,313		2,557		2,842		3,022		(136	)		(6	)		(845	)		(28	)
Home equity lines of credit		14,418		14,526		14,674		14,707		14,917		(108	)		(1	)		(499	)		(3	)
Home equity loans serviced by others1		860		930		986		1,054		1,126		(70	)		(8	)		(266	)		(24	)
Home equity lines of credit serviced by others1		273		339		389		441		494		(66	)		(19	)		(221	)		(45	)
Automobile		14,075		13,847		13,828		13,876		13,727		228			2			348			3
Student		5,516		5,006		4,359		3,846		3,355		510			10			2,161			64
Credit card		1,613		1,581		1,634		1,628		1,613		32			2			—			—
Other retail		1,207		1,132		1,083		976		963		75			7			244			25
Total retail		53,994		53,019		52,828		52,162		51,470		975			2			2,524			5
Total loans and leases	$	103,551	$	100,991	$	99,042	$	97,431	$	96,538	$	2,560			3	%	$	7,013			7	%
Loans held for sale	$	478	$	365	$	325	$	369	$	397	$	113			31	%	$	81			20	%
Other loans held for sale2		372		386		40		51		300		(14	)		(4	)		72			24
Loans and loans held for sale	$	104,401	$	101,742	$	99,407	$	97,851	$	97,235	$	2,659			3	%	$	7,166			7	%
DEPOSITS:
Demand	$	27,108	$	27,186	$	27,649	$	27,373	$	26,678	($	78	)		—	%	$	430			2	%
Checking with interest		19,838		18,706		17,921		18,350		17,114		1,132			6			2,724			16
Regular savings		8,841		8,748		8,218		8,011		8,080		93			1			761			9
Money market accounts		37,503		35,513		36,727		35,539		35,735		1,990			6			1,768			5
Term deposits		12,967		12,453		12,024		12,593		13,008		514			4			(41	)		—
Total deposits	$	106,257	$	102,606	$	102,539	$	101,866	$	100,615	$	3,651			4		$	5,642			6

¹ Our Serviced by Others (“SBO”) portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

² As of June 30, 2016, includes $322 million of troubled debt restructured loans that were transferred from loans and leases to other loans held for sale during the first half of 2016, including $262 million of residential mortgages and $60 million of home equity loans. As of March 31, 2016, includes $373 million of troubled debt restructured loans that were transferred from loans and leases to other loans held for sale on March 31, 2016, including $288 million of residential mortgages and $85 million of home equity loans.

7

AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS

(dollars in millions)

AVERAGE BALANCES	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
ASSETS:
Interest-bearing cash and due from banks and deposits in banks	$	1,948		$	1,675		$	1,526		$	1,322		$	2,054		$	273			16	%	($	106	)		(5	%)	$	1,811		$	2,073		($	262	)		(13	%)
Taxable investment securities		24,050			23,864			24,129			24,440			25,081			186			1			(1,031	)		(4	)		23,957			25,019			(1,062	)		(4	)
Non-taxable investment securities		9			9			9			9			10			—			—			(1	)		(10	)		9			10			(1	)		(10	)
Total investment securities		24,059			23,873			24,138			24,449			25,091			186			1			(1,032	)		(4	)		23,966			25,029			(1,063	)		(4	)
Investment securities and interest-bearing deposits		26,007			25,548			25,664			25,771			27,145			459			2			(1,138	)		(4	)		25,777			27,102			(1,325	)		(5	)
Commercial		35,622			34,018			33,080			32,832			32,855			1,604			5			2,767			8			34,820			32,386			2,434			8
Commercial real estate		9,649			9,108			8,855			8,406			7,947			541			6			1,702			21			9,379			7,824			1,555			20
Leases		3,863			3,917			3,884			3,936			3,894			(54	)		(1	)		(31	)		(1	)		3,890			3,895			(5	)		—
Total commercial		49,134			47,043			45,819			45,174			44,696			2,091			4			4,438			10			48,089			44,105			3,984			9
Residential mortgages		13,491			13,465			13,030			12,470			11,980			26			—			1,511			13			13,478			11,918			1,560			13
Home equity loans		2,231			2,471			2,751			2,928			3,138			(240	)		(10	)		(907	)		(29	)		2,351			3,234			(883	)		(27	)
Home equity lines of credit		14,477			14,632			14,659			14,813			15,084			(155	)		(1	)		(607	)		(4	)		14,554			15,196			(642	)		(4	)
Home equity loans serviced by others1		899			958			1,017			1,086			1,134			(59	)		(6	)		(235	)		(21	)		929			1,164			(235	)		(20	)
Home equity lines of credit serviced by others1		299			340			375			425			469			(41	)		(12	)		(170	)		(36	)		320			495			(175	)		(35	)
Automobile		13,972			13,792			13,824			13,810			13,484			180			1			488			4			13,882			13,210			672			5
Student		5,407			4,852			4,052			3,530			3,029			555			11			2,378			79			5,130			2,827			2,303			81
Credit cards		1,600			1,601			1,625			1,616			1,606			(1	)		—			(6	)		—			1,600			1,621			(21	)		(1	)
Other retail		1,167			1,108			1,047			939			986			59			5			181			18			1,137			1,013			124			12
Total retail		53,543			53,219			52,380			51,617			50,910			324			1			2,633			5			53,381			50,678			2,703			5
Total loans and leases		102,677			100,262			98,199			96,791			95,606			2,415			2			7,071			7			101,470			94,783			6,687			7
Loans held for sale, at fair value		368			306			325			327			308			62			20			60			19			337			275			62			23
Other loans held for sale4		440			49			13			128			146			391			NM			294			201			245			119			126			106
Interest-earning assets		129,492			126,165			124,201			123,017			123,205			3,327			3			6,287			5			127,829			122,279			5,550			5
Allowance for loan and lease losses		(1,219	)		(1,212	)		(1,196	)		(1,197	)		(1,198	)		(7	)		1			(21	)		2			(1,216	)		(1,195	)		(21	)		2
Goodwill		6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876			6,876			—			—
Other noninterest-earning assets		7,030			6,951			6,417			6,407			6,638			79			1			392			6			6,990			6,469			521			8
Total noninterest-earning assets		12,687			12,615			12,097			12,086			12,316			72			1			371			3			12,650			12,150			500			4
TOTAL ASSETS	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	3,399			2	%	$	6,658			5	%	$	140,479		$	134,429		$	6,050			5	%
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES:
Checking with interest	$	19,003		$	17,993		$	17,117		$	16,934		$	16,561		$	1,010			6	%	$	2,442			15	%	$	18,498		$	16,302		$	2,196			13	%
Money market and savings		44,949			44,619			44,575			44,572			42,977			330			1			1,972			5			44,784			42,325			2,459			6
Term deposits		12,581			12,199			12,201			12,730			12,576			382			3			5			—			12,390			12,381			9			—
Total interest-bearing deposits		76,533			74,811			73,893			74,236			72,114			1,722			2			4,419			6			75,672			71,008			4,664			7
Federal funds purchased and securities sold under agreements to repurchase2		974			881			1,635			2,880			4,372			93			11			(3,398	)		(78	)		927			4,489			(3,562	)		(79	)
Other short-term borrowed funds		3,743			3,098			4,964			5,062			6,498			645			21			(2,755	)		(42	)		3,421			6,732			(3,311	)		(49	)
Long-term borrowed funds		10,321			9,894			6,004			4,059			3,902			427			4			6,419			165			10,108			3,916			6,192			158
Total borrowed funds		15,038			13,873			12,603			12,001			14,772			1,165			8			266			2			14,456			15,137			(681	)		(4	)
Total interest-bearing liabilities		91,571			88,684			86,496			86,237			86,886			2,887			3			4,685			5			90,128			86,145			3,983			5
Total demand deposits		27,448			27,170			27,475			26,754			26,419			278			1			1,029			4			27,309			26,089			1,220			5
Other liabilities		3,145			3,112			2,721			2,604			2,592			33			1			553			21			3,128			2,679			449			17
TOTAL LIABILITIES		122,164			118,966			116,692			115,595			115,897			3,198			1			6,267			5			120,565			114,913			5,652			5
STOCKHOLDERS’ EQUITY		20,015			19,814			19,606			19,508			19,624			201			3			391			2			19,914			19,516			398			2
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	3,399			2	%	$	6,658			5	%	$	140,479		$	134,429		$	6,050			5	%
Memo: Total average tangible common equity3	$	13,386		$	13,169		$	12,948		$	12,834		$	12,947		$	217			2	%	$	439			3	%	$	13,277		$	13,277		$	329			3	%
Total deposits (interest-bearing and demand)	$	103,981		$	101,981		$	101,368		$	100,990		$	98,533		$	2,000			2	%	$	5,448			6	%	$	102,981		$	97,097		$	5,884			6	%

¹ Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

² Balances are net of certain short-term receivables associated with reverse repurchase agreements; interest expense includes the full cost of the repurchase agreements and certain hedging costs.

³  This is a non-GAAP financial measure. For further information on this measure, refer to page 30.

⁴  During the first half of 2016, certain troubled debt restructured loans were transferred from loans and leases to other loans held for sale. The average balances of troubled debt restructured loans held in other loans held for sale was $355 million and $179 million during the three and six months ended June 30, 2016, respectively.

8

AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS, CONTINUED

(dollars in millions, except rates)

	QUARTERLY TRENDS																									FOR THE SIX MONTHS ENDED JUNE 30,
AVERAGE ANNUALIZED YIELDS & RATES	2Q16					1Q16					4Q15					3Q15					2Q15					2016					2015
	Rate			Income/ Expense		Rate			Income/ Expense		Rate			Income/ Expense		Rate			Income/ Expense		Rate			Income/ Expense		Rate			Income/ Expense		Rate			Income/ Expense
INTEREST-EARNING ASSETS:
Interest-bearing deposits in banks		0.39	%	$	2		0.42	%	$	2		0.41	%	$	1		0.44	%	$	2		0.22	%	$	1		0.40	%	$	4		0.20	%	$	2
Taxable investment securities		2.35			141		2.43			145		2.52			153		2.52			154		2.47			155		2.39			286		2.51			314
Non-taxable investment securities		2.60			—		2.60			—		2.60			—		2.60			—		2.60			—		2.60			—		2.60			—
Total investment securities		2.35			141		2.43			145		2.52			153		2.52			154		2.47			155		2.39			286		2.51			314
Investment securities and interest-bearing deposits					143					147					154					156					156					290					316
Commercial		3.09			278		3.08			264		2.92			247		2.89			243		2.83			235		3.08			542		2.83			461
Commercial real estate		2.74			67		2.69			62		2.49			56		2.50			54		2.55			51		2.71			129		2.57			101
Leases		2.45			24		2.44			24		2.44			23		2.45			24		2.56			25		2.45			48		2.55			50
Total commercial		2.97			369		2.95			350		2.80			326		2.78			321		2.75			311		2.96			719		2.76			612
Residential mortgages		3.61			122		3.76			126		3.77			123		3.76			117		3.76			113		3.68			248		3.77			225
Home equity loans		5.64			31		5.51			34		5.30			37		5.32			40		5.43			42		5.57			65		5.41			87
Home equity lines of credit		3.18			115		3.11			113		2.95			109		2.97			111		2.94			110		3.15			228		2.94			221
Home equity loans serviced by others1		7.11			16		6.94			17		6.94			17		6.93			19		7.04			20		7.02			33		7.06			41
Home equity lines of credit serviced by others1		2.02			1		2.19			2		2.40			2		2.30			3		2.56			3		2.11			3		2.57			6
Automobile		2.95			103		2.83			97		2.80			98		2.75			95		2.68			90		2.89			200		2.73			179
Student		5.07			69		5.02			60		4.97			51		5.01			45		5.05			38		5.05			129		5.09			71
Credit cards		11.18			44		11.29			45		10.91			45		10.95			44		10.92			44		11.24			89		11.01			88
Other retail		8.94			26		8.66			24		8.08			22		7.72			17		7.61			19		8.80			50		7.60			39
Total retail		3.95			527		3.91			518		3.82			504		3.79			491		3.77			479		3.93			1,045		3.80			957
Total loans and leases		3.48			896		3.46			868		3.34			830		3.32			812		3.30			790		3.47			1,764		3.32			1,569
Loans held for sale		3.41			3		3.70			3		3.44			2		3.69			3		3.41			3		3.54			6		3.36			5
Other loans held for sale		4.00			4		6.64			1		5.93			—		6.96			3		7.79			3		4.26			5		7.43			4
Total interest-earning assets		3.22			1,046		3.23	%		1,019		3.15			986		3.13			974		3.08			952		3.23			2,065		3.10			1,894
INTEREST-BEARING LIABILITIES:
Checking with interest		0.16		$	8		0.14		$	7		0.11		$	5		0.12			5		0.11			5		0.15			15		0.11			9
Money market and savings		0.29			32		0.26			29		1.27			30		0.29			33		0.27			29		0.28			61		0.26			54
Term deposits		0.74			23		0.80			24		0.84			25		0.84			27		0.81			26		0.77			47		0.79			49
Total interest-bearing deposits		0.33			63		0.32			60		0.33			60		0.34			65		0.33			60		0.33			123		0.32			112
Federal funds purchased and securities sold under agreements to repurchase2		0.19			—		0.23			1		0.64			3		0.52			4		0.22			2		0.21			1		0.41			9
Other short-term borrowed funds		1.25			12		1.40			11		1.26			16		1.32			17		1.18			19		1.32			23		1.00			34
Long-term borrowed funds		1.87			48		1.75			43		2.44			37		3.16			32		3.19			31		1.81			91		3.21			63
Total borrowed funds		1.60			60		1.58			55		1.74			56		1.75			53		1.43			52		1.59			115		1.40			106
Total interest-bearing liabilities		0.54			123		0.52			115		0.53			116		0.54			118		0.52			112		0.53			238		0.51			218
INTEREST RATE SPREAD		2.68	%				2.71	%				2.62	%				2.59	%				2.56	%				2.70	%				2.59	%
NET INTEREST MARGIN		2.84					2.86					2.77					2.76					2.72					2.85					2.74
Memo Total deposits costs		0.24			63		0.24			60		0.24			60		0.25			65		0.24			60		0.24			123		0.23			112

¹ Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

² Balances are net of certain short-term receivables associated with reverse repurchase agreements; interest expense includes the full cost of the repurchase agreements and certain hedging costs.

9

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING

(dollars in millions, except ratios)

	SECOND QUARTER 2016												FIRST QUARTER 2016											CHANGE
																								2Q16 from 1Q16
	Consumer Banking			Commercial Banking			Other1			Consolidated			Consumer Banking			Commercial Banking			Other1		Consolidated			$			%
Net interest income	$	602		$	314		$	7		$	923		$	581		$	300		$	23	$	904		$	19			2	%
Noninterest income		219			122			14			355			208			99			23		330			25			8
Total revenue		821			436			21			1,278			789			399			46		1,234			44			4
Noninterest expense		632			186			9			827			616			187			8		811			16			2
Profit before provision for credit losses		189			250			12			451			173			212			38		423			28			7
Provision for credit losses		49			(1	)		42			90			63			9			19		91			(1	)		(1	)
Income (loss) before income tax expense (benefit)		140			251			(30	)		361			110			203			19		332			29			9
Income tax expense (benefit)		50			87			(19	)		118			39			70			—		109			9			8
Net income	$	90		$	164		($	11	)	$	243		$	71		$	133		$	19	$	223		$	20			9	%
Average Balances
Total assets	$	55,660		$	47,388		$	39,131		$	142,179		$	55,116		$	45,304		$	38,360	$	138,780		$	3,399			2	%
Total loans and leases2		54,353			46,073			3,059			103,485			53,744			43,899			2,974		100,617			2,868			3
Deposits		71,863			25,113			7,005			103,981			70,871			24,833			6,277		101,981			2,000			2
Interest-earning assets		54,400			46,170			28,922			129,492			53,793			43,987			28,385		126,165			3,327			3
Key Metrics
Net interest margin		4.45	%		2.74	%		NM			2.84	%		4.35	%		2.74	%		NM		2.86	%		(2	) bps
Efficiency ratio4		76.98			42.88			NM			64.71			78.08			46.74			NM		65.66			(95	) bps
Loans-to-deposits ratio (average balances)		75.63			183.46			NM			99.52			75.83			176.78			NM		98.66			86	bps
Return on average total tangible assets4		0.65			1.39			NM			0.72			0.52			1.18			NM		0.68			4	bps
Return on average tangible common equity3,4		7.09			13.04			NM			7.30			5.59			11.19			NM		6.61			69	bps

¹  Includes the financial impact of non-core, liquidating loan portfolios and other non-core assets, our treasury activities, wholesale funding activities, securities portfolio, community development assets and other unallocated assets, liabilities, revenues, provision for credit losses and expenses not attributed to our Consumer Banking or Commercial Banking segments.

²  Includes loans and leases held for sale.

³  Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

⁴  These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

10

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING, (CONTINUED)

(dollars in millions, except ratios)

	SECOND QUARTER 2016												SECOND QUARTER 2015												CHANGE
																									2Q16 from 2Q15
	Consumer Banking			Commercial Banking			Other1			Consolidated			Consumer Banking			Commercial Banking			Other1			Consolidated			$			%
Net interest income	$	602		$	314		$	7		$	923		$	544		$	286		$	10		$	840		$	83			10	%
Noninterest income		219			122			14			355			230			108			22			360			(5	)		(1	)
Total revenue		821			436			21			1,278			774			394			32			1,200			78			7
Noninterest expense		632			186			9			827			613			181			47			841			(14	)		(2	)
Profit before provision for credit losses		189			250			12			451			161			213			(15	)		359			92			26
Provision for credit losses		49			(1	)		42			90			60			7			10			77			13			17
Income (loss) before income tax expense (benefit)		140			251			(30	)		361			101			206			(25	)		282			79			28
Income tax expense (benefit)		50			87			(19	)		118			35			71			(14	)		92			26			28
Net income (loss)	$	90		$	164		($	11	)	$	243		$	66		$	135		($	11	)	$	190		$	53			28	%
Average Balances
Total assets	$	55,660		$	47,388		$	39,131		$	142,179		$	52,489		$	42,617		$	40,415		$	135,521		$	6,658			5	%
Total loans and leases2		54,353			46,073			3,059			103,485			51,024			41,467			3,569			96,060			7,425			8
Deposits		71,863			25,113			7,005			103,981			69,963			22,717			5,853			98,533			5,448			6
Interest-earning assets		54,400			46,170			28,922			129,492			51,061			41,535			30,609			123,205			6,287			5
Key Metrics
Net interest margin		4.45	%		2.74	%		NM			2.84	%		4.28	%		2.76	%		NM			2.72	%		12	bps
Efficiency ratio4		76.98			42.88			NM			64.71			79.25			46.07			NM			70.02			(531	) bps
Loans-to-deposits ratio (average balances)		75.63			183.46			NM			99.52			72.93			182.54			NM			97.49			203	bps
Return on average total tangible assets4		0.65			1.39			NM			0.72			0.51			1.27			NM			0.59			13	bps
Return on average tangible common equity3,4		7.09			13.04			NM			7.30			5.66			11.69			NM			5.90			140	bps

¹  Includes the financial impact of non-core, liquidating loan portfolios and other non-core assets, our treasury activities, wholesale funding activities, securities portfolio, community development assets and other unallocated assets, liabilities, revenues, provision for credit losses and expenses not attributed to our Consumer Banking or Commercial Banking segments.

² Includes loans and leases held for sale.

³  Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

⁴  These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

11

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATING, (CONTINUED)

(dollars in millions, except ratios)

	SIX MONTHS ENDED JUNE 30, 2016												SIX MONTHS ENDED JUNE 30, 2015												CHANGE
																									2016 from 2015
	Consumer Banking			Commercial Banking			Other1			Consolidated			Consumer Banking			Commercial Banking			Other1			Consolidated			$			%
Net interest income	$	1,183		$	614		$	30		$	1,827		$	1,077		$	562		$	37		$	1,676		$	151			9	%
Noninterest income		427			221			37			685			449			208			50			707			(22	)		(3	)
Total revenue		1,610			835			67			2,512			1,526			770			87			2,383			129			5
Noninterest expense		1,248			373			17			1,638			1,209			354			88			1,651			(13	)		(1	)
Profit (loss) before provision for credit losses		362			462			50			874			317			416			(1	)		732			142			19
Provision for credit losses		112			8			61			181			123			(14	)		26			135			46			34
Income (loss) before income tax expense (benefit)		250			454			(11	)		693			194			430			(27	)		597			96			16
Income tax expense (benefit)		89			157			(19	)		227			67			148			(17	)		198			29			15
Net income (loss)	$	161		$	297		$	8		$	466		$	127		$	282		($	10	)	$	399		$	67			17	%
Average Balances
Total assets	$	55,388		$	46,346		$	38,745		$	140,479		$	52,048		$	42,114		$	40,267		$	134,429		$	6,050			5	%
Total loans and leases2		54,049			44,986			3,017			102,052			50,644			40,857			3,676			95,177			6,875			7
Deposits		71,367			24,973			6,641			102,981			68,747			22,326			6,024			97,097			5,884			6
Interest-earning assets		54,097			45,078			28,654			127,829			50,679			40,943			30,657			122,279			5,550			5
Key Metrics
Net interest margin		4.40	%		2.74	%		NM			2.85	%		4.29	%		2.77	%		NM			2.74	%		11	bps
Efficiency ratio4		77.52			44.73			NM			65.18			79.25			46.04			NM			69.27			(409	) bps
Loans-to-deposits ratio (average balances)		75.73			180.14			NM			99.10			73.67			183.00			NM			98.02			108	bps
Return on average total tangible assets4		0.58			1.29			NM			0.70			0.49			1.35			NM			0.63			7	bps
Return on average tangible common equity3,4		6.34			12.14			NM			6.96			5.48			12.41			NM			6.21			75	bps

¹  Includes the financial impact of non-core, liquidating loan portfolios and other non-core assets, our treasury activities, wholesale funding activities, securities portfolio, community development assets and other unallocated assets, liabilities, revenues, provision for credit losses and expenses not attributed to our Consumer Banking or Commercial Banking segments.

² Includes loans and leases held for sale.

³  Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

⁴  These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

12

SEGMENT FINANCIAL HIGHLIGHTS - CONSUMER BANKING

(dollars in millions, except ratios)

	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
CONSUMER BANKING																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
Net interest income	$	602		$	581		$	565		$	556		$	544		$	21			4	%	$	58			11	%	$	1,183		$	1,077		$	106			10	%
Noninterest income		219			208			226			235			230			11			5			(11	)		(5	)		427			449			(22	)		(5	)
Total revenue		821			789			791			791			774			32			4			47			6			1,610			1,526			84			6
Noninterest expense		632			616			624			623			613			16			3			19			3			1,248			1,209			39			3
Profit before provision for credit losses		189			173			167			168			161			16			9			28			17			362			317			45			14
Provision for credit losses		49			63			65			64			60			(14	)		(22	)		(11	)		(18	)		112			123			(11	)		(9	)
Income before income tax expense		140			110			102			104			101			30			27			39			39			250			194			56			29
Income tax expense		50			39			35			36			35			11			28			15			43			89			67			22			33
Net income	$	90		$	71		$	67		$	68		$	66		$	19			27	%	$	24			36	%	$	161		$	127		$	34			27	%
Average Balances
Total assets	$	55,660		$	55,116		$	54,065		$	53,206		$	52,489		$	544			1	%	$	3,171			6	%	$	55,388		$	52,048		$	3,340			6	%
Total loans and leases1		54,353			53,744			52,737			51,886			51,024			609			1			3,329			7			54,049			50,644			3,405			7
Deposits		71,863			70,871			70,939			70,527			69,963			992			1			1,900			3			71,367			68,747			2,620			4
Interest-earning assets		54,400			53,793			52,785			51,928			51,061			607			1			3,339			7			54,097			50,679			3,418			7
Key Metrics
Net interest margin		4.45	%		4.35	%		4.25	%		4.25	%		4.28	%		10	bps					17	bps					4.40	%		4.29	%		11	bps
Efficiency ratio3		76.98			78.08			78.85			78.72			79.25			(110	) bps					(227	) bps					77.52			79.25			(173	) bps
Loans-to-deposits ratio (average balances)		75.63			75.83			74.34			73.57			72.93			(20	) bps					270	bps					75.73			73.67			206	bps
Return on average total tangible assets3		0.65			0.52			0.49			0.49			0.51			13	bps					14	bps					0.59			0.49			9	bps
Return on average tangible common equity2,3		7.09			5.59			5.50			5.50			5.66			150	bps					143	bps					6.34			5.48			86	bps

¹ Includes loans and leases held for sale.

²  Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

³  These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

13

SEGMENT FINANCIAL HIGHLIGHTS - COMMERCIAL BANKING

(dollars in millions, except ratios)

	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
COMMERCIAL BANKING																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
Net interest income	$	314		$	300		$	301		$	299		$	286		$	14			5	%	$	28			10	%	$	614		$	562		$	52			9	%
Noninterest income		122			99			107			100			108			23			23			14			13			221			208			13			6
Total revenue		436			399			408			399			394			37			9			42			11			835			770			65			8
Noninterest expense		186			187			180			175			181			(1	)		(1	)		5			3			373			354			19			5
Profit before provision for credit losses		250			212			228			224			213			38			18			37			17			462			416			46			11
Provision for credit losses		(1	)		9			(2	)		3			7			(10	)		(111	)		(8	)		(114	)		8			(14	)		22			(157	)
Income before income tax expense		251			203			230			221			206			48			24			45			22			454			430			24			6
Income tax expense		87			70			78			76			71			17			24			16			23			157			148			9			6
Net income	$	164		$	133		$	152		$	145		$	135		$	31			23	%	$	29			21	%	$	297		$	282		$	15			5	%
Average Balances
Total assets	$	47,388		$	45,304		$	43,835		$	43,113		$	42,617		$	2,084			5	%	$	4,771			11	%	$	46,346		$	42,114		$	4,232			10	%
Total loans and leases1		46,073			43,899			42,642			41,993			41,467			2,174			5			4,606			11			44,986			40,857			4,129			10
Deposits		25,113			24,833			24,600			24,604			22,717			280			1			2,396			11			24,973			22,326			2,647			12
Interest-earning assets		46,170			43,987			42,777			42,070			41,535			2,183			5			4,635			11			45,078			40,943			4,135			10
Key Metrics
Net interest margin		2.74	%		2.74	%		2.80	%		2.81	%		2.76	%		—	bps					(2	) bps					2.74	%		2.77	%		(3	) bps
Efficiency ratio3		42.88			46.74			44.02			43.75			46.07			(386	) bps					(319	) bps					44.73			46.04			(131	) bps
Loans-to-deposits ratio (average balances)		183.46			176.78			173.34			170.68			182.54			668	bps					92	bps					180.14			183.00			(286	) bps
Return on average total tangible assets3		1.39			1.18			1.37			1.34			1.27			21	bps					12	bps					1.29			1.35			(6	) bps
Return on average tangible common equity2,3		13.04			11.19			12.57			12.24			11.69			185	bps					135	bps					12.14			12.41			(27	) bps

¹ Includes loans and leases held for sale.

²  Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

³ These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

14

SEGMENT FINANCIAL HIGHLIGHTS - OTHER

(dollars in millions)

	QUARTERLY TRENDS																									FOR THE SIX MONTHS ENDED JUNE 30,
OTHER1														2Q16 Change																		2016 Change
	2Q16			1Q16		4Q15			3Q15		2Q15			1Q16						2Q15						2016			2015			2015
														$			%			$			%									$			%
Net interest income	$	7		$	23	$	4		$	1	$	10		($	16	)		(70	%)	($	3	)		(30	%)	$	30		$	37		($	7	)		(19	%)
Noninterest income		14			23		29			18		22			(9	)		(39	)		(8	)		(36	)		37			50			(13	)		(26	)
Total revenue		21			46		33			19		32			(25	)		(54	)		(11	)		(34	)		67			87			(20	)		(23	)
Noninterest expense		9			8		6			—		47			1			13			(38	)		(81	)		17			88			(71	)		(81	)
Profit (loss) before provision for credit losses		12			38		27			19		(15	)		(26	)		(68	)		27			180			50			(1	)		51			NM
Provision for credit losses		42			19		28			9		10			23			121			32			NM			61			26			35			135
(Loss) Income before income tax (benefit) expense		(30	)		19		(1	)		10		(25	)		(49	)		NM			(5	)		(20	)		(11	)		(27	)		16			59
Income tax (benefit) expense		(19	)		—		(3	)		3		(14	)		(19	)		NM			(5	)		(36	)		(19	)		(17	)		(2	)		(12	)
Net income (loss)	($	11	)	$	19	$	2		$	7	($	11	)	($	30	)		(158	%)	$	—			—	%	$	8		($	10	)	$	18			180	%
Average Balances
Total assets	$	39,131		$	38,360	$	38,398		$	38,784	$	40,415		$	771			2	%	($	1,284	)		(3	%)	$	38,745		$	40,267		($	1,522	)		(4	%)
Total loans and leases		3,059			2,974		3,158			3,367		3,569			85			3			(510	)		(14	)		3,017			3,676			(659	)		(18	)
Deposits		7,005			6,277		5,829			5,859		5,853			728			12			1,152			20			6,641			6,024			617			10
Interest-earning assets		28,922			28,385		28,639			29,019		30,609			537			2			(1,687	)		(6	)		28,654			30,657			(2,003	)		(7	)

¹ Includes the financial impact of non-core, liquidating loan portfolios and other non-core assets, our treasury activities, wholesale funding activities, securities portfolio, community development assets and other unallocated assets, liabilities, revenues, provision for credit losses and expenses not attributed to our Consumer Banking or Commercial Banking segments.

15

SEGMENT FINANCIAL HIGHLIGHTS - CONSOLIDATED

(dollars in millions, except ratios)

	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
CONSOLIDATED																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
Net interest income	$	923		$	904		$	870		$	856		$	840		$	19			2	%	$	83			10	%	$	1,827		$	1,676		$	151			9	%
Noninterest income		355			330			362			353			360			25			8			(5	)		(1	)		685			707			(22	)		(3	)
Total revenue		1,278			1,234			1,232			1,209			1,200			44			4			78			7			2,512			2,383			129			5
Noninterest expense		827			811			810			798			841			16			2			(14	)		(2	)		1,638			1,651			(13	)		(1	)
Profit before provision for credit losses		451			423			422			411			359			28			7			92			26			874			732			142			19
Provision for credit losses		90			91			91			76			77			(1	)		(1	)		13			17			181			135			46			34
Income before income tax expense		361			332			331			335			282			29			9			79			28			693			597			96			16
Income tax expense		118			109			110			115			92			9			8			26			28			227			198			29			15
Net income	$	243		$	223		$	221		$	220		$	190		$	20			9	%	$	53			28	%	$	466		$	399		$	67			17	%
Average Balances
Total assets	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	3,399			2	%	$	6,658			5	%	$	140,479		$	134,429		$	6,050			5	%
Total loans and leases1		103,485			100,617			98,537			97,246			96,060			2,868			3			7,425			8			102,052			95,177			6,875			7
Deposits		103,981			101,981			101,368			100,990			98,533			2,000			2			5,448			6			102,981			97,097			5,884			6
Interest-earning assets		129,492			126,165			124,201			123,017			123,205			3,327			3			6,287			5			127,829			122,279			5,550			5
Key Metrics
Net interest margin		2.84	%		2.86	%		2.77	%		2.76	%		2.72	%		(2	) bps					12	bps					2.85	%		2.74	%		11	bps
Efficiency ratio2		64.71			65.66			65.76			66.02			70.02			(95	) bps					(531	) bps					65.18			69.27			(409	) bps
Loans-to-deposits ratio (average balances)		99.52			98.66			97.21			96.29			97.49			86	bps					203	bps					99.10			98.02			108	bps
Return on average total tangible assets2		0.72			0.68			0.67			0.68			0.59			4	bps					13	bps					0.70			0.63			7	bps
Return on average tangible common equity2		7.30			6.61			6.75			6.60			5.90			69	bps					140	bps					6.96			6.21			75	bps

¹ Includes loans and leases held for sale.

²  These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

16

SEGMENT FINANCIAL HIGHLIGHTS

(dollars in millions)

	QUARTERLY TRENDS																							FOR THE SIX MONTHS ENDED JUNE 30,
												2Q16 Change																	2016 Change
	2Q16		1Q16		4Q15		3Q15		2Q15			1Q16						2Q15						2016		2015			2015
												$			%			$			%								$			%
Net interest income:
Consumer Banking	$	602	$	581	$	565	$	556	$	544		$	21			4	%	$	58			11	%	$	1,183	$	1,077		$	106			10	%
Commercial Banking		314		300		301		299		286			14			5			28			10			614		562			52			9
Other		7		23		4		1		10			(16	)		(70	)		(3	)		(30	)		30		37			(7	)		(19	)
Net interest income	$	923	$	904	$	870	$	856	$	840		$	19			2	%	$	83			10	%	$	1,827	$	1,676		$	151			9	%
Noninterest income:
Consumer Banking	$	219	$	208	$	226	$	235	$	230		$	11			5	%	($	11	)		(5	%)	$	427	$	449		($	22	)		(5	%)
Commercial Banking		122		99		107		100		108			23			23			14			13			221		208			13			6
Other		14		23		29		18		22			(9	)		(39	)		(8	)		(36	)		37		50			(13	)		(26	)
Noninterest income	$	355	$	330	$	362	$	353	$	360		$	25			8	%	($	5	)		(1	)%	$	685	$	707		($	22	)		(3	%)
Total revenue:
Consumer Banking	$	821	$	789	$	791	$	791	$	774		$	32			4	%	$	47			6	%	$	1,610	$	1,526		$	84			6	%
Commercial Banking		436		399		408		399		394			37			9			42			11			835		770			65			8
Other		21		46		33		19		32			(25	)		(54	)		(11	)		(34	)		67		87			(20	)		(23	)
Total revenue	$	1,278	$	1,234	$	1,232	$	1,209	$	1,200		$	44			4	%	$	78			7	%	$	2,512	$	2,383		$	129			5	%
Noninterest expense:
Consumer Banking	$	632	$	616	$	624	$	623	$	613		$	16			3	%	$	19			3	%	$	1,248	$	1,209		$	39			3	%
Commercial Banking		186		187		180		175		181			(1	)		(1	)		5			3			373		354			19			5
Other		9		8		6		—		47			1			13			(38	)		(81	)		17		88			(71	)		(81	)
Noninterest expense	$	827	$	811	$	810	$	798	$	841		$	16			2	%	($	14	)		(2	%)	$	1,638	$	1,651		($	13	)		(1	%)
Profit before provision for credit losses:
Consumer Banking	$	189	$	173	$	167	$	168	$	161		$	16			9	%	$	28			17	%	$	362	$	317		$	45			14	%
Commercial Banking		250		212		228		224		213			38			18			37			17			462		416			46			11
Other		12		38		27		19		(15	)		(26	)		(68	)		27			(180	)		50		(1	)		51			NM
Profit before provision for credit losses	$	451	$	423	$	422	$	411	$	359		$	28			7	%	$	92			26	%	$	874	$	732		$	142			19	%

17

SEGMENT FINANCIAL HIGHLIGHTS, CONTINUED

(dollars in millions)

	QUARTERLY TRENDS																									FOR THE SIX MONTHS ENDED JUNE 30,
														2Q16 Change																		2016 Change
	2Q16			1Q16		4Q15			3Q15		2Q15			1Q16						2Q15						2016			2015			2015
														$			%			$			%									$			%
Provision for credit losses:
Consumer Banking	$	49		$	63	$	65		$	64	$	60		($	14	)		(22	%)	($	11	)		(18	%)	$	112		$	123		($	11	)		(9	%)
Commercial Banking		(1	)		9		(2	)		3		7			(10	)		(111	)		(8	)		(114	)		8			(14	)		22			(157	)
Other		42			19		28			9		10			23			121			32			NM			61			26			35			135
Provision for credit losses	$	90		$	91	$	91		$	76	$	77		($	1	)		(1	%)	$	13			17	%	$	181		$	135		$	46			34	%
Income before income tax expense:
Consumer Banking	$	140		$	110	$	102		$	104	$	101		$	30			27	%	$	39			39	%	$	250		$	194		$	56			29	%
Commercial Banking		251			203		230			221		206			48			24			45			22			454			430			24			6
Other		(30	)		19		(1	)		10		(25	)		(49	)		NM			(5	)		20			(11	)		(27	)		16			(59	)
Income before income tax expense	$	361		$	332	$	331		$	335	$	282		$	29			9	%	$	79			28	%	$	693		$	597		$	96			16	%
Income tax expense:
Consumer Banking	$	50		$	39	$	35		$	36	$	35		$	11			28	%	$	15			43	%	$	89		$	67		$	22			33	%
Commercial Banking		87			70		78			76		71			17			24			16			23			157			148			9			6
Other		(19	)		—		(3	)		3		(14	)		(19	)		100			(5	)		36			(19	)		(17	)		(2	)		12
Income tax expense	$	118		$	109	$	110		$	115	$	92		$	9			8	%	$	26			28	%	$	227		$	198		$	29			15	%
Net income:
Consumer Banking	$	90		$	71	$	67		$	68	$	66		$	19			27	%	$	24			36	%	$	161		$	127		$	34			27	%
Commercial Banking		164			133		152			145		135			31			23			29			21			297			282			15			5
Other		(11	)		19		2			7		(11	)		(30	)		(158	)		—			—			8			(10	)		18			(180	)
Net income	$	243		$	223	$	221		$	220	$	190		$	20			9	%	$	53			28	%	$	466		$	399		$	67			17	%

18

SEGMENT FINANCIAL HIGHLIGHTS, CONTINUED

(dollars in millions)

	QUARTERLY TRENDS																					FOR THE SIX MONTHS ENDED JUNE 30,
AVERAGE BALANCES											2Q16 Change															2016 Change
	2Q16		1Q16		4Q15		3Q15		2Q15		1Q16					2Q15						2016		2015		2015
											$		%			$			%							$			%
Total assets:
Consumer Banking	$	55,660	$	55,116	$	54,065	$	53,206	$	52,489	$	544		1	%	$	3,171			6	%	$	55,388	$	52,048	$	3,340			6	%
Commercial Banking		47,388		45,304		43,835		43,113		42,617		2,084		5			4,771			11			46,346		42,114		4,232			10
Other		39,131		38,360		38,398		38,784		40,415		771		2			(1,284	)		(3	)		38,745		40,267		(1,522	)		(4	)
Total Assets	$	142,179	$	138,780	$	136,298	$	135,103	$	135,521	$	3,399		2	%	$	6,658			5	%	$	140,479	$	134,429	$	6,050			5	%
Loans and leases1:
Consumer Banking	$	54,353	$	53,744	$	52,737	$	51,886	$	51,024	$	609		1	%	$	3,329			7	%	$	54,049	$	50,644	$	3,405			7	%
Commercial Banking		46,073		43,899		42,642		41,993		41,467		2,174		5			4,606			11			44,986		40,857		4,129			10
Other		3,059		2,974		3,158		3,367		3,569		85		3			(510	)		(14	)		3,017		3,676		(659	)		(18	)
Total loans and leases	$	103,485	$	100,617	$	98,537	$	97,246	$	96,060	$	2,868		3	%	$	7,425			8	%	$	102,052	$	95,177	$	6,875			7	%
Deposits:
Consumer Banking	$	71,863	$	70,871	$	70,939	$	70,527	$	69,963	$	992		1	%	$	1,900			3	%	$	71,367	$	68,747	$	2,620			4	%
Commercial Banking		25,113		24,833		24,600		24,604		22,717		280		1			2,396			11			24,973		22,326		2,647			12
Other		7,005		6,277		5,829		5,859		5,853		728		12			1,152			20			6,641		6,024		617			10
Total deposits	$	103,981	$	101,981	$	101,368	$	100,990	$	98,533	$	2,000		2	%	$	5,448			6	%	$	102,981	$	97,097	$	5,884			6	%
Interest-earning assets:
Consumer Banking	$	54,400	$	53,793	$	52,785	$	51,928	$	51,061	$	607		1	%	$	3,339			7	%	$	54,097	$	50,679	$	3,418			7	%
Commercial Banking		46,170		43,987		42,777		42,070		41,535		2,183		5			4,635			11			45,078		40,943		4,135			10
Other		28,922		28,385		28,639		29,019		30,609		537		2			(1,687	)		(6	)		28,654		30,657		(2,003	)		(7	)
Total interest-earning assets	$	129,492	$	126,165	$	124,201	$	123,017	$	123,205	$	3,327		3	%	$	6,287			5	%	$	127,829	$	122,279	$	5,550			5	%

¹ Includes loans and leases held for sale.

19

SEGMENT FINANCIAL HIGHLIGHTS, CONTINUED

	QUARTERLY TRENDS																					FOR THE SIX MONTHS ENDED JUNE 30,
KEY METRICS																2Q16 Change												2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16			2Q15			2016			2015			2015
																bps			bps									bps
Net Interest Margin (NIM)
Consumer Banking		4.45	%		4.35	%		4.25	%		4.25	%		4.28	%		10			17			4.40	%		4.29	%		11
Commercial Banking		2.74			2.74			2.80			2.81			2.76			—			(2	)		2.74			2.77			(3	)
Other		NM			NM			NM			NM			NM			—			—			NM			NM			—
NIM		2.84			2.86			2.77			2.76			2.72			(2	)		12			2.85			2.74			11
Efficiency Ratio3
Consumer Banking		76.98	%		78.08	%		78.85	%		78.72	%		79.25	%		(110	)		(227	)		77.52	%		79.25	%		(173	)
Commercial Banking		42.88			46.74			44.02			43.75			46.07			(386	)		(319	)		44.73			46.04			(131	)
Other		NM			NM			NM			NM			NM			—			—			NM			NM			—
Efficiency Ratio		64.71			65.66			65.76			66.02			70.02			(95	)		(531	)		65.18			69.27			(409	)
Loans to Deposits Ratio (average balance) (LDR)1
Consumer Banking		75.63	%		75.83	%		74.34	%		73.57	%		72.93	%		(20	)		270			75.73	%		73.67	%		206
Commercial Banking		183.46			176.78			173.34			170.68			182.54			668			92			180.14			183.00			(286	)
Other		NM			NM			NM			NM			NM			—			—			NM			NM			—
LDR		99.52			98.66			97.21			96.29			97.49			86			203			99.10			98.02			108
Return on Average Tangible Assets (ROTA)3
Consumer Banking		0.65	%		0.52	%		0.49	%		0.51	%		0.51	%		13			14			0.58	%		0.49	%		9
Commercial Banking		1.39			1.18			1.37			1.34			1.27			21			12			1.29			1.35			(6	)
Other		NM			NM			NM			NM			NM			—			—			NM			NM			—
ROTA		0.72			0.68			0.67			0.68			0.59			4			13			0.70			0.63			7
Return on Average Tangible Common Equity (ROTCE)2,3
Consumer Banking		7.09	%		5.59	%		5.50	%		5.67	%		5.66	%		150			143			6.34	%		5.48	%		86
Commercial Banking		13.04			11.19			12.57			12.24			11.69			185			135			12.14			12.41			(27	)
Other		NM			NM			NM			NM			NM			—			—			NM			NM			—
ROTCE		7.30			6.61			6.75			6.60			5.90			69			140			6.96			6.21			75

¹ Includes loans and leases held for sale.

²  Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements.

³  These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

20

CREDIT-RELATED INFORMATION

(dollars in millions)

	AS OF										JUNE 30, 2016 CHANGE
	June 30, 2016		Mar 31, 2016		Dec 31, 2015		Sept 30, 2015		June 30, 2015		Mar 31, 2016						June 30, 2015
											$			%			$			%
CREDIT EXPOSURE:
Commercial	$	35,927	$	34,671	$	33,264	$	32,726	$	33,027	$	1,256			4	%	$	2,900			9	%
Commercial real estate		9,825		9,406		8,971		8,678		8,157		419			4			1,668			20
Leases		3,805		3,895		3,979		3,865		3,884		(90	)		(2	)		(79	)		(2	)
Total commercial		49,557		47,972		46,214		45,269		45,068		1,585			3			4,489			10
Residential mortgages		13,855		13,345		13,318		12,792		12,253		510			4			1,602			13
Home equity loans		2,177		2,313		2,557		2,842		3,022		(136	)		(6	)		(845	)		(28	)
Home equity lines of credit		14,418		14,526		14,674		14,707		14,917		(108	)		(1	)		(499	)		(3	)
Home equity loans serviced by others1		860		930		986		1,054		1,126		(70	)		(8	)		(266	)		(24	)
Home equity lines of credit serviced by others1		273		339		389		441		494		(66	)		(19	)		(221	)		(45	)
Automobile		14,075		13,847		13,828		13,876		13,727		228			2			348			3
Student		5,516		5,006		4,359		3,846		3,355		510			10			2,161			64
Credit card		1,613		1,581		1,634		1,628		1,613		32			2			—			—
Other retail		1,207		1,132		1,083		976		963		75			7			244			25
Total retail		53,994		53,019		52,828		52,162		51,470		975			2			2,524			5
Total loans and leases		103,551		100,991		99,042		97,431		96,538		2,560			3			7,013			7
Derivative receivable - commercial		1,297		1,057		619		828		658		240			23			639			97
Derivative receivable - retail		15		11		6		10		7		4			36			8			114
Total derivative receivable		1,312		1,068		625		838		665		244			23			647			97
Total credit-related assets		104,863		102,059		99,667		98,269		97,203		2,804			3			7,660			8
Undrawn commitments to extend credit - commercial		32,018		30,352		30,823		29,751		29,422		1,666			5			2,596			9
Financial standby letters of credit		1,946		1,921		2,010		2,077		2,181		25			1			(235	)		(11	)
Performance letters of credit		37		41		42		45		55		(4	)		(10	)		(18	)		(33	)
Commercial letters of credit		70		63		87		63		59		7			11			11			19
Marketing rights		46		47		47		47		49		(1	)		(2	)		(3	)		(6	)
Risk participation agreements		64		53		26		39		22		11			21			42			191
Total commercial lending-related arrangements		34,181		32,477		33,035		32,022		31,788		1,704			5			2,393			8
Undrawn commitments to extend credit - retail		26,604		26,637		25,701		25,755		26,465		(33	)		—			139			1
Residential mortgage loans sold with recourse		9		10		10		11		12		(1	)		(10	)		(3	)		(25	)
Total retail lending-related arrangements		26,613		26,647		25,711		25,766		26,477		(34	)		—			136			1
Total lending-related arrangements		60,794		59,124		58,746		57,788		58,265		1,670			3			2,529			4
Total credit exposure	$	165,657	$	161,183	$	158,413	$	156,057	$	155,468	$	4,474			3	%	$	10,189			7	%
Memo: Total credit exposure by product category
Commercial exposure	$	85,035	$	81,506	$	79,868	$	78,119	$	77,514	$	3,529			4	%	$	7,521			10	%
Retail exposure		80,622		79,677		78,545		77,938		77,954		945			1			2,668			3
Total credit exposure	$	165,657	$	161,183	$	158,413	$	156,057	$	155,468	$	4,474			3	%	$	10,189			7	%

¹ Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

21

CREDIT-RELATED INFORMATION, CONTINUED

(dollars in millions, except ratios)

	AS OF															JUNE 30, 2016 CHANGE
	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015			Mar 31, 2016						June 30, 2015
																$			%			$			%
NONPERFORMING ASSETS:
Commercial	$	277		$	284		$	71		$	88		$	83		($	7	)		(2	%)	$	194			234	%
Commercial real estate		70			86			77			42			42			(16	)		(19	)		28			67
Leases		—			—			—			—			—			—			—			—			—
Total commercial		347			370			148			130			125			(23	)		(6	)		222			178
Residential mortgages2, 3		174			174			331			324			329			—			—			(155	)		(47	)
Home equity loans2, 4		104			99			135			144			151			5			5			(47	)		(31	)
Home equity lines of credit4		251			261			272			270			292			(10	)		(4	)		(41	)		(14	)
Home equity loans serviced by others5		33			37			38			39			44			(4	)		(11	)		(11	)		(25	)
Home equity lines of credit serviced by others5		38			38			32			31			26			—			—			12			46
Automobile		43			42			42			38			30			1			2			13			43
Student		37			40			41			39			35			(3	)		(8	)		2			6
Credit card		14			16			16			15			14			(2	)		(13	)		—			—
Other retail		3			2			5			4			4			1			50			(1	)		(25	)
Total retail		697			709			912			904			925			(12	)		(2	)		(228	)		(25	)
Nonperforming loans and leases1		1,044			1,079			1,060			1,034			1,050			(35	)		(3	)		(6	)		(1	)
Accruing loans past due 90 days or more not included above	$	26		$	32		$	—		$	—		$	—
Accruing loans past due 90 days or more included above		—			—			9			15			8
Commercial		1			1			1			1			1			—			—			—			—
Retail		47			47			45			38			37			—			—			10			27
Other nonperforming assets		48			48			46			39			38			—			—			10			26
Nonperforming assets	$	1,092		$	1,127		$	1,106		$	1,073		$	1,088		($	35	)		(3	)%	$	4			—	%
NONPERFORMING ASSETS BY PRODUCT CATEGORY:
Commercial	$	348		$	371		$	149		$	131		$	126		($	23	)		(6	%)	$	222			176	%
Retail		744			756			957			942			962			(12	)		(2	)		(218	)		(23	)
Nonperforming assets	$	1,092		$	1,127		$	1,106		$	1,073		$	1,088		($	35	)		(3	%)	$	4			—	%
ASSET QUALITY RATIOS
Allowance for loan and lease losses to loans and leases		1.20	%		1.21	%		1.23	%		1.23	%		1.24	%		(1	) bps					(4	) bps
Allowance for loan and lease losses to nonperforming loans and leases1		119.27			113.43			114.64			116.12			114.37			(584	) bps					490	bps
Nonperforming loans and leases to loans and leases1		1.01			1.07			1.07			1.06			1.09			(6	) bps					(8	) bps
Nonperforming assets to total assets1		0.75			0.80			0.80			0.79			0.79			(5	) bps					(4	) bps

¹ Nonperforming loans and leases included loans and leases on nonaccrual. Nonperforming loans and leases for periods prior to March 31, 2016 included loans and leases on nonaccrual and loans and leases accruing and 90 days or more past due.

² Nonperforming balances at June 30, 2016 excluded $71 million of troubled debt restructured loans held for sale, including $54 million of residential mortgages and $17 million of home equity loans. On March 31, 2016, $97 million of previously nonperforming troubled debt restructured loans were transferred from loans and leases to other loans held for sale.

³  Nonperforming balances at June 30, 2016 excluded $15 million of first lien residential mortgage loans that are 100% guaranteed by the Federal Housing Administration and $34 million of guaranteed residential mortgage loans sold to GNMA for which the Company has the right but not the obligation to repurchase.

⁴ Restated September 30, 2015 and June 30, 2015 to conform to the current presentation.

⁵  Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

22

CREDIT-RELATED INFORMATION, CONTINUED

(dollars in millions)

	QUARTERLY TRENDS																										FOR THE SIX MONTHS ENDED JUNE 30,
CHARGE-OFFS, RECOVERIES AND RELATED RATIOS															2Q16 Change																	2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15		1Q16						2Q15						2016		2015			2015
															$			%			$			%								$			%
GROSS CHARGE-OFFS:
Commercial	$	4		$	13		$	3		$	10		$	12	($	9	)		(69	%)	($	8	)		(67	%)	$	17	$	17		$	—			—	%
Commercial real estate		3			—			1			1			3		3			100			—			—			3		4			(1	)		(25	)
Leases		—			—			—			—			—		—			—			—			—			—		—			—			—
Total commercial		7			13			4			11			15		(6	)		(46	)		(8	)		(53	)		20		21			(1	)		(5	)
Residential mortgages		5			6			5			5			6		(1	)		(17	)		(1	)		(17	)		11		12			(1	)		(8	)
Home equity loans		3			3			11			8			6		—			—			(3	)		(50	)		6		15			(9	)		(60	)
Home equity lines of credit		11			13			9			11			17		(2	)		(15	)		(6	)		(35	)		24		39			(15	)		(38	)
Home equity loans serviced by others1		11			9			9			8			7		2			22			4			57			20		15			5			33
Home equity lines of credit serviced by others1		4			3			4			3			3		1			33			1			33			7		7			—			—
Automobile		32			39			39			31			24		(7	)		(18	)		8			33			71		47			24			51
Student		14			11			14			12			15		3			27			(1	)		(7	)		25		25			—			—
Credit card		15			14			14			14			16		1			7			(1	)		(6	)		29		31			(2	)		(6	)
Other retail		11			15			15			17			12		(4	)		(27	)		(1	)		(8	)		26		24			2			8
Total retail		106			113			120			109			106		(7	)		(6	)		—			—			219		215			4			2
Total gross charge-offs	$	113		$	126		$	124		$	120		$	121	($	13	)		(10	%)	($	8	)		(7	%)	$	239	$	236		$	3			1	%
GROSS RECOVERIES:
Commercial	$	5		$	3		$	4		$	3		$	5	$	2			67	%	$	—			—	%	$	8	$	11		($	3	)		(27	%)
Commercial real estate		—			1			3			3			3		(1	)		(100	)		(3	)		100			1		25			(24	)		(96	)
Leases		—			—			—			—			—		—			—			—			—			—		—			—			—
Total commercial		5			4			7			6			8		1			25			(3	)		(38	)		9		36			(27	)		(75	)
Residential mortgages		2			3			4			3			2		(1	)		(33	)		—			—			5		5			—			—
Home equity loans		3			2			4			3			2		1			50			1			50			5		4			1			25
Home equity lines of credit		4			3			4			3			6		1			33			(2	)		(33	)		7		11			(4	)		(36	)
Home equity loans serviced by others1		6			4			4			5			5		2			50			1			20			10		8			2			25
Home equity lines of credit serviced by others1		2			1			2			2			2		1			100			—			—			3		4			(1	)		(25	)
Automobile		17			17			15			14			11		—			—			6			55			34		20			14			70
Student		3			3			3			3			3		—			—			—			—			6		6			—			—
Credit card		2			2			2			2			2		—			—			—			—			4		4			—			—
Other retail		4			4			2			4			2		—			—			2			100			8		6			2			33
Total retail		43			39			40			39			35		4			10			8			23			82		68			14			21
Total gross recoveries	$	48		$	43		$	47		$	45		$	43	$	5			12	%	$	5			12	%	$	91	$	104		($	13	)		(13	%)
NET CHARGE-OFFS (RECOVERIES):
Commercial	($	1	)	$	10		($	1	)	$	7		$	7	($	11	)		(110	%)	($	8	)		(114	%)	$	9	$	6		$	3			50	%
Commercial real estate		3			(1	)		(2	)		(2	)		—		4			NM			3			100			2		(21	)		23			110
Leases		—			—			—			—			—		—			—			—			—			—		—			—			—
Total commercial		2			9			(3	)		5			7		(7	)		(78	)		(5	)		(71	)		11		(15	)		26			173
Residential mortgages		3			3			1			2			4		—			—			(1	)		(25	)		6		7			(1	)		(14	)
Home equity loans		—			1			7			5			4		(1	)		(100	)		(4	)		(100	)		1		11			(10	)		(91	)
Home equity lines of credit		7			10			5			8			11		(3	)		(30	)		(4	)		(36	)		17		28			(11	)		(39	)
Home equity loans serviced by others1		5			5			5			3			2		—			—			3			150			10		7			3			43
Home equity lines of credit serviced by others1		2			2			2			1			1		—			—			1			100			4		3			1			33
Automobile		15			22			24			17			13		(7	)		(32	)		2			15			37		27			10			37
Student		11			8			11			9			12		3			38			(1	)		(8	)		19		19			—			—
Credit card		13			12			12			12			14		1			8			(1	)		(7	)		25		27			(2	)		(7	)
Other retail		7			11			13			13			10		(4	)		(36	)		(3	)		(30	)		18		18			—			—
Total retail		63			74			80			70			71		(11	)		(15	)		(8	)		(11	)		137		147			(10	)		(7	)
Total net charge-offs (recoveries)	$	65		$	83		$	77		$	75		$	78	($	18	)		(22	%)	($	13	)		(17	%)	$	148	$	132		$	16			12	%

¹ Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

23

CREDIT-RELATED INFORMATION, CONTINUED

(dollars in millions, except rates)

	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																$			%			$			%									$			%
ANNUALIZED NET CHARGE-OFF (RECOVERY) RATES:
Commercial		(0.01	%)		0.12	%		(0.01	%)		0.08	%		0.10	%		(13	) bps					(11	) bps					0.05	%		0.04	%		1	bps
Commercial real estate		0.11			(0.01	)		0.11			(0.11	)		(0.03	)		12	bps					14	bps					0.05			(0.54	)		59	bps
Leases		—			—			—			—			—			—	bps					—	bps					—			—			—	bps
Total commercial		0.01			0.08			(0.03	)		0.04			0.07			(7	) bps					(6	) bps					0.05			(0.07	)		12	bps
Residential mortgages		0.08			0.09			0.05			0.05			0.14			(1	) bps					(6	) bps					0.08			0.12			(4	) bps
Home equity loans		0.01			0.06			1.07			0.60			0.56			(5	) bps					(55	) bps					0.03			0.69			(66	) bps
Home equity lines of credit		0.19			0.26			0.12			0.21			0.29			(7	) bps					(10	) bps					0.22			0.37			(15	) bps
Home equity loans serviced by others1		2.47			2.03			1.81			1.12			0.70			44	bps					177	bps					2.25			1.10			115	bps
Home equity lines of credit serviced by others1		2.35			2.09			1.99			1.23			0.89			26	bps					146	bps					2.21			1.24			97	bps
Automobile		0.41			0.65			0.71			0.50			0.38			(24	) bps					3	bps					0.53			0.40			13	bps
Student		0.83			0.64			1.07			1.07			1.56			19	bps					(73	) bps					0.74			1.36			(62	) bps
Credit card		3.19			3.07			2.98			2.96			3.36			12	bps					(17	) bps					3.13			3.31			(18	) bps
Other retail		3.00			4.18			4.38			5.56			4.42			(118	) bps					(142	) bps					3.58			3.85			(27	) bps
Total retail		0.48			0.55			0.60			0.54			0.56			(7	) bps					(8	) bps					0.51			0.58			(7	) bps
Total loans and leases		0.25	%		0.33	%		0.31	%		0.31	%		0.33	%		(8	) bps					(8	) bps					0.29	%		0.28	%		1	bps
Memo: Average loans:
Commercial	$	35,622		$	34,018		$	33,080		$	32,832		$	32,855		$	1,604			5	%	$	2,767			8	%	$	34,820		$	32,386		$	2,434			8	%
Commercial real estate		9,649			9,108			8,855			8,406			7,947			541			6			1,702			21			9,379			7,824			1,555			20
Leases		3,863			3,917			3,884			3,936			3,894			(54	)		(1	)		(31	)		(1	)		3,890			3,895			(5	)		—
Total commercial		49,134			47,043			45,819			45,174			44,696			2,091			4			4,438			10			48,089			44,105			3,984			9
Residential mortgages		13,491			13,465			13,030			12,470			11,980			26			—			1,511			13			13,478			11,918			1,560			13
Home equity loans		2,231			2,471			2,751			2,928			3,138			(240	)		(10	)		(907	)		(29	)		2,351			3,234			(883	)		(27	)
Home equity lines of credit		14,477			14,632			14,659			14,813			15,084			(155	)		(1	)		(607	)		(4	)		14,554			15,196			(642	)		(4	)
Home equity loans serviced by others1		899			958			1,017			1,086			1,134			(59	)		(6	)		(235	)		(21	)		929			1,164			(235	)		(20	)
Home equity lines of credit serviced by others1		299			340			375			425			469			(41	)		(12	)		(170	)		(36	)		320			495			(175	)		(35	)
Automobile		13,972			13,792			13,824			13,810			13,484			180			1			488			4			13,882			13,210			672			5
Student		5,407			4,852			4,052			3,530			3,029			555			11			2,378			79			5,130			2,827			2,303			81
Credit card		1,600			1,601			1,625			1,616			1,606			(1	)		—			(6	)		—			1,600			1,621			(21	)		(1	)
Other retail		1,167			1,108			1,047			939			986			59			5			181			18			1,137			1,013			124			12
Total retail		53,543			53,219			52,380			51,617			50,910			324			1			2,633			5			53,381			50,678			2,703			5
Total loans and leases	$	102,677		$	100,262		$	98,199		$	96,791		$	95,606		$	2,415			2	%	$	7,071			7	%	$	101,470		$	94,783		$	6,687			7	%

¹ Our SBO portfolio consists of purchased loans and lines of credit that were originally serviced by others. We now service a portion of this portfolio internally.

24

CREDIT-RELATED INFORMATION, CONTINUED

(dollars in millions)

	QUARTERLY TRENDS																								FOR THE SIX MONTHS ENDED JUNE 30,
													2Q16 Change																	2016 Change
SUMMARY OF CHANGES IN THE COMPONENTS OF THE ALLOWANCE FOR CREDIT LOSSES	2Q16		1Q16		4Q15			3Q15		2Q15			1Q16						2Q15						2016		2015			2015
													$			%			$			%								$			%
Allowance for loan and lease losses - beginning	$	1,224	$	1,216	$	1,201		$	1,201	$	1,202		$	8			1	%	$	22			2	%	$	1,216	$	1,195		$	21			2	%
Charge-offs:
Commercial		7		13		4			11		15			(6	)		(46	)		(8	)		(53	)		20		21			(1	)		(5	)
Retail		106		113		120			109		106			(7	)		(6	)		—			—			219		215			4			2
Total charge-offs		113		126		124			120		121			(13	)		(10	)		(8	)		(7	)		239		236			3			1
Recoveries:
Commercial		5		4		7			6		8			1			25			(3	)		(38	)		9		36			(27	)		(75	)
Retail		43		39		40			39		35			4			10			8			23			82		68			14			21
Total recoveries		48		43		47			45		43			5			12			5			12			91		104			(13	)		(13	)
Net charge-offs		65		83		77			75		78			(18	)		(22	)		(13	)		(17	)		148		132			16			12
Provision for loan and lease losses:
Commercial		45		46		18			15		(6	)		(1	)		(2	)		51			NM			91		6			85			NM
Retail		42		45		74			58		83			(3	)		(7	)		(41	)		(49	)		87		134			(47	)		(35	)
Total provision for loan and lease losses		87		91		92			73		77			(4	)		(4	)		10			13			178		140			38			27
Sale/Other		—		—		—			2		—			—			—			—			—			—		(2	)		2			(100	)
Allowance for loan and lease losses - ending	$	1,246	$	1,224	$	1,216		$	1,201	$	1,201		$	22			2	%	$	45			4	%	$	1,246	$	1,201		$	45			4	%
Reserve for unfunded lending commitments - beginning	$	58	$	58	$	59		$	56	$	56		$	—			—	%	$	2			4	%	$	58	$	61		($	3	)		(5	%)
Provision for unfunded lending commitments		3		—		(1	)		3		—			3			100			3			100			3		(5	)		8			(160	)
Reserve for unfunded lending commitments - ending	$	61	$	58	$	58		$	59	$	56		$	3			5	%	$	5			9	%	$	61	$	56		$	5			9	%
Total allowance for credit losses - ending	$	1,307	$	1,282	$	1,274		$	1,260	$	1,257		$	25			2	%	$	50			4	%	$	1,307	$	1,257		$	50			4	%

25

CREDIT-RELATED INFORMATION, CONTINUED

(dollars in millions)

	AS OF										JUNE 30, 2016 CHANGE
	June 30, 2016		Mar 31, 2016		Dec 31, 2015		Sept 30, 2015		June 30, 2015		Mar 31, 2016						June 30, 2015
ALLOWANCE COMPONENTS											$			%			$			%
ALLOWANCE FOR CREDIT LOSSES
Individually evaluated	$	52	$	42	$	36	$	23	$	21	$	10			24	%	$	31			148	%
Formula-based evaluation		685		649		618		611		600		36			6			85			14
Total commercial		737		691		654		634		621		46			7			116			19
Individually evaluated		79		82		101		104		107		(3	)		(4	)		(28	)		(26	)
Formula-based evaluation		491		509		519		522		529		(18	)		(4	)		(38	)		(7	)
Total retail		570		591		620		626		636		(21	)		(4	)		(66	)		(10	)
Total allowance for credit losses	$	1,307	$	1,282	$	1,274	$	1,260	$	1,257	$	25			2	%	$	50			4	%

26

CAPITAL AND RATIOS

(dollars in millions, except ratios)

	AS OF																											FOR THE SIX MONTHS ENDED JUNE 30,
																JUNE 30, 2016 CHANGE																2016 Change
	June 30, 2016			Mar 31, 2016			Dec 31, 2015			Sept 30, 2015			June 30, 2015			Mar 31, 2016						June 30, 2015						2016		2015		2015
																$			%			$			%							$			%
CAPITAL RATIOS AND COMPONENTS1 (PRELIMINARY)
CET1 capital	$	13,768		$	13,570		$	13,389		$	13,200		$	13,270		$	198			1	%	$	498			4	%
Tier 1 capital		14,015			13,817			13,636			13,447			13,517			198			1			498			4
Total capital		17,823			17,587			17,505			17,307			17,123			236			1			700			4
Risk-weighted assets		119,492			116,591			114,084			112,277			112,131			2,901			2			7,361			7
Adjusted average assets2		136,301			132,951			130,455			129,334			129,505			3,350			3			6,796			5
CET1 capital ratio		11.5	%		11.6	%		11.7	%		11.8	%		11.8	%
Tier 1 capital ratio		11.7			11.9			12.0			12.0			12.1
Total capital ratio		14.9			15.1			15.3			15.4			15.3
Tier 1 leverage ratio		10.3			10.4			10.5			10.4			10.4
Pro forma Basel III fully phased-in common equity tier 1 capital ratio4		11.5			11.6			11.7			11.7			11.8
TANGIBLE COMMON EQUITY (period-end):
Common stockholders’ equity	$	19,979		$	19,718		$	19,399		$	19,353		$	19,339		$	261			1	%	$	640			3	%	$	19,979	$	19,339	$	640			3	%
Less: Goodwill		6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876		6,876		—			—
Less: Other intangible assets		2			3			3			3			4			(1	)		(33	)		(2	)		(50	)		2		4		(2	)		(50	)
Add: Deferred tax liabilities3		507			494			480			465			450			13			3			57			13			507		450		57			13
Total tangible common equity4	$	13,608		$	13,333		$	13,000		$	12,939		$	12,909		$	275			2	%	$	699			5	%	$	13,608	$	12,909	$	699			5	%
TANGIBLE COMMON EQUITY (average):
Common stockholders’ equity	$	19,768		$	19,567		$	19,359		$	19,261		$	19,391		$	201			1	%	$	377			2	%	$	19,667	$	19,399	$	268			1	%
Less: Goodwill		6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876		6,876		—			—
Less: Other intangible assets		2			3			3			4			5			(1	)		(33	)		(3	)		(60	)		2		5		(3	)		(60	)
Add: Deferred tax liabilities3		496			481			468			453			437			15			3			59			14			488		430		58			13
Total tangible common equity4	$	13,386		$	13,169		$	12,948		$	12,834		$	12,947		$	217			2	%	$	439			3	%	$	13,277	$	12,948	$	329			3	%
INTANGIBLE ASSETS (period-end):
Goodwill	$	6,876		$	6,876		$	6,876		$	6,876		$	6,876		$	—			—	%	$	—			—	%	$	6,876	$	6,876	$	—			—	%
Other intangible assets		2			3			3			3			4			(1	)		(33	)		(2	)		(50	)		2		4		(2	)		(50	)
Total intangible assets	$	6,878		$	6,879		$	6,879		$	6,879		$	6,880		($	1	)		—	%	($	2	)		—	%	$	6,878	$	6,880	($	2	)		—	%

¹ Basel III transitional rules for institutions applying the standardized approach to calculating risk-weighted assets became effective January 1, 2015. The capital ratios and associated components are prepared using the Basel III standardized transitional approach.

²  Adjusted average assets include quarterly average assets, less deductions for disallowed goodwill and other intangibles assets, net of deferred tax liabilities related to tax deductible goodwill, and the accumulated other comprehensive income impact related to the adoption of post-retirement benefit plan guidance under GAAP.

³ Deferred tax liabilities relate to tax-deductible goodwill, which is netted against goodwill when calculating tangible common equity.

⁴  These are non-GAAP financial measures. For further information on these measures, refer to pages 30-31.

27

PER-SHARE RELATED INFORMATION

(dollars in millions, except per share and ratio data)

	QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																2Q16 Change																		2016 Change
	2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
EARNINGS PER SHARE DATA																$			%			$			%									$			%
Basic earnings per share:
Net income	$	243		$	223		$	221		$	220		$	190		$	20			9	%	$	53			28	%	$	466		$	399		$	67			17	%
Less: Preferred stock dividends		—			7			—			7			—			(7	)		(100	)		—			—			7			—			7			100
Net income available to common stockholders	$	243		$	216		$	221		$	213		$	190		$	27			13	%	$	53			28	%	$	459		$	399		$	60			15	%
Net income available to common stockholders excluding restructuring charges and special items1	$	243		$	216		$	221		$	213		$	215		$	27			13	%	$	28			13	%	$	459		$	430		$	29			7	%
Total weighted-average basic shares outstanding		528,968,330			528,070,648			527,648,630			530,985,255			537,729,248			897,682			—			(8,760,918	)		(2	)		528,519,489			541,986,653			(13,467,164	)		(2	)
Net income per share - basic	$	0.46		$	0.41		$	0.42		$	0.40		$	0.35		$	0.05			12	%	$	0.11			31	%	$	0.87		$	0.74		$	0.13			18	%
Net income per share, excluding restructuring charges and special items - basic1	$	0.46		$	0.41		$	0.42		$	0.40		$	0.40		$	0.05			12	%	$	0.06			15	%	$	0.87		$	0.79		$	0.08			10	%
Diluted earnings per share:
Net income applicable to common stockholders	$	243		$	216		$	221		$	213		$	190		$	27			13		$	53			28		$	459		$	399		$	60			15
Add: Restructuring charges and special items, net of income tax expense		—			—			—			—			25			—			—			(25	)		(100	)		—			31			(31	)		(100	)
Net income applicable to common stockholders, excluding restructuring charges and special items1	$	243		$	216		$	221		$	213		$	215		$	27			13	%	$	28			13	%	$	459		$	430		$	29			7	%
Total weighted-average basic shares outstanding		528,968,330			528,070,648			527,648,630			530,985,255			537,729,248			897,682			—			(8,760,918	)		(2	)		528,519,489			541,986,653			(13,467,164	)		(2	)
Add: Weighted-average dilutive shares		1,396,873			2,375,540			2,627,043			2,412,903			2,180,118			(978,667	)		(41	)		(783,245	)		(36	)		1,877,382			2,817,615			(940,233	)		(33	)
Total weighted-average diluted shares outstanding		530,365,203			530,446,188			530,275,673			533,398,158			539,909,366			(80,985	)		—			(9,544,163	)		(2	)		530,396,871			544,804,268			(14,407,397	)		(3	)
Net income per share - diluted	$	0.46		$	0.41		$	0.42		$	0.40		$	0.35		$	0.05			12	%	$	0.11			31	%	$	0.87		$	0.73		$	0.14			19	%
Net income per share, excluding restructuring charges and special items - diluted1	$	0.46		$	0.41		$	0.42		$	0.40		$	0.40		$	0.05			12	%	$	0.06			15	%	$	0.87		$	0.79		$	0.08			10	%
COMMON SHARES OUTSTANDING
Common shares - at end of period		529,094,976			528,933,727			527,774,428			527,636,510			537,149,717			161,249			—	%		(8,054,741	)		(1	%)		529,094,976			537,149,717			(8,054,741	)		(1	%)
Cash dividends declared and paid per share	$	0.12		$	0.10		$	0.10		$	0.10		$	0.10		$	0.02			20		$	0.02			20		$	0.22		$	0.20		$	0.02			10
Book value per share	$	37.76		$	37.28		$	36.76		$	36.68		$	36.00		$	0.48			1		$	1.76			5		$	37.76		$	36.00		$	1.76			5
Tangible book value per share1	$	25.72		$	25.21		$	24.63		$	24.52		$	24.03		$	0.51			2		$	1.69			7		$	25.72		$	24.03		$	1.69			7
Dividend payout ratio		26	%		24	%		24	%		25	%		28	%		200	bps					(200	) bps					25	%		27	%		(200	) bps
SHARE PRICE
High	$	24.24		$	25.99		$	27.17		$	28.18		$	28.71		($	1.75	)		(7	%)	($	4.47	)		(16	%)	$	25.99		$	28.71		($	2.72	)		(9	%)
Low		18.34			18.04			22.48			21.14			24.03			0.30			2			(5.69	)		(24	)		18.04			22.67			(4.63	)		(20	)
Close		19.98			20.95			26.19			23.86			27.31			(0.97	)		(5	)		(7.33	)		(27	)		19.98			27.31			(7.33	)		(27	)
Market Capitalization		10,571			11,081			13,822			12,589			14,670			(510	)		(5	)		(4,099	)		(28	)		10,571			14,670			(4,099	)		(28	)

¹ These are non-GAAP financial measures. For further information on these measures, refer to pages 29-35.

28

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (Excluding restructuring charges and special items)

(dollars in millions, except per-share data)

This document contains non-GAAP financial measures. The table below presents reconciliations of certain non-GAAP measures. These reconciliations exclude restructuring charges and/or special items, which are included, where applicable, in the financial results presented in accordance with GAAP. Restructuring charges and special items include expenses related to our efforts to improve processes and enhance efficiencies, as well as rebranding, separation from RBS and regulatory expenses.

The non-GAAP measures presented below include reconciliations to the most directly comparable GAAP measures and are: “noninterest income”, “total revenue”, “ noninterest expense”, “pre-provision profit”, “income before income tax expense”, “income tax expense”, “net income”, “net income available to common stockholders”, “salaries and employee benefits”, “outside services”, “occupancy”, “equipment expense”, “other operating expense”, “net income per average common share”, “return on average common equity” and “return on average total assets”. In addition, we present computations for “tangible book value per common share”, “return on average tangible common equity”, “return on average total tangible assets”, “efficiency ratio” and “pro forma Basel III fully phased-in common equity tier 1 capital” as part of our non-GAAP measures.

We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe restructuring charges and special items in any period do not reflect the operational performance of the business in that period and, accordingly, it is useful to consider these line items with and without restructuring charges and special items. We believe this presentation also increases comparability of period-to-period results.

We also consider pro forma capital ratios defined by banking regulators but not effective at each period end to be non-GAAP financial measures. Since analysts and banking regulators may assess our capital adequacy using these pro forma ratios, we believe they are useful to provide investors the ability to assess our capital adequacy on the same basis.

Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for our results as reported under GAAP.

		QUARTERLY TRENDS																						FOR THE SIX MONTHS ENDED JUNE 30,
													2Q16 Change																2016 Change
		2Q16		1Q16		4Q15		3Q15		2Q15			1Q16					2Q15						2016		2015			2015
													$		%			$			%								$			%
Noninterest income, excluding special items:
Noninterest income (GAAP)		$	355	$	330	$	362	$	353	$	360		$	25		8	%	($	5	)		(1	%)	$	685	$	707		($	22	)		(3	%)
Less: Special items			—		—		—		—		—			—		—			—			—			—		—			—			—
Noninterest income, excluding special items (non-GAAP)		$	355	$	330	$	362	$	353	$	360		$	25		8	%	($	5	)		(1	%)	$	685	$	707		($	22	)		(3	%)
Total revenue, excluding special items:
Total revenue (GAAP)	A	$	1,278	$	1,234	$	1,232	$	1,209	$	1,200		$	44		4	%	$	78			7	%	$	2,512	$	2,383		$	129			5	%
Less: Special items			—		—		—		—		—			—		—			—			—			—		—			—			—
Total revenue, excluding special items (non-GAAP)	B	$	1,278	$	1,234	$	1,232	$	1,209	$	1,200		$	44		4	%	$	78			7	%	$	2,512	$	2,383		$	129			5	%
Noninterest expense, excluding restructuring charges and special items:
Noninterest expense (GAAP)	C	$	827	$	811	$	810	$	798	$	841		$	16		2	%	($	14	)		(2	%)	$	1,638	$	1,651		($	13	)		(1	%)
Less: Restructuring charges and special items			—		—		—		—		40			—		—			(40	)		(100	)		—		50			(50	)		(100	)
Noninterest expense, excluding restructuring charges and special items (non-GAAP)	D	$	827	$	811	$	810	$	798	$	801		$	16		2	%	$	26			3	%	$	1,638	$	1,601		$	37			2	%
Pre-provision profit, excluding restructuring charges and special items:
Total revenue, excluding restructuring charges and special items (non-GAAP)		$	1,278	$	1,234	$	1,232	$	1,209	$	1,200		$	44		4	%	$	78			7	%	$	2,512	$	2,383		$	129			5	%
Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP)			827		811		810		798		801			16		2			26			3			1,638		1,601			37			2
Pre-provision profit, excluding restructuring charges and special items (non-GAAP)		$	451	$	423	$	422	$	411	$	399		$	28		7	%	$	52			13	%	$	874	$	782		$	92			12	%
Income before income tax expense, excluding restructuring charges and special items:
Income before income tax expense (GAAP)		$	361	$	332	$	331	$	335	$	282		$	29		9	%	$	79			28	%	$	693	$	597		$	96			16	%
Less: Income before income tax (benefit) related to restructuring charges and special items (GAAP)			—		—		—		—		(40	)		—		—			40			(100	)		—		(50	)		50			(100	)
Income before income tax expense, excluding restructuring charges and special items (non-GAAP)		$	361	$	332	$	331	$	335	$	322		$	29		9	%	$	39			12	%	$	693	$	647		$	46			7	%

29

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (Excluding restructuring charges and special items) (CONTINUED)

(dollars in millions, except per-share data)

		QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																	2Q16 Change																		2016 Change
		2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																	$			%			$			%									$			%
Income tax expense, excluding restructuring charges and special items:
Income tax expense (GAAP)		$	118		$	109		$	110		$	115		$	92		$	9			8	%	$	26			28	%	$	227		$	198		$	29			15	%
Less: Income tax (benefit) related to restructuring charges and special items (GAAP)			—			—			—			—			(15	)		—			—			15			(100	)		—			(19	)		19			(100	)
Income tax expense, excluding restructuring charges and special items (non-GAAP)		$	118		$	109		$	110		$	115		$	107		$	9			8	%	$	11			10	%	$	227		$	217		$	10			5	%
Net income, excluding restructuring charges and special items:
Net income (GAAP)	E	$	243		$	223		$	221		$	220		$	190		$	20			9	%	$	53			28	%	$	466		$	399		$	67			17	%
Add: Restructuring charges and special items, net of income tax expense (benefit)			—			—			—			—			25			—			—			(25	)		(100	)		—			31			(31	)		(100	)
Net income, excluding restructuring charges and special items (non-GAAP)	F	$	243		$	223		$	221		$	220		$	215		$	20			9	%	$	28			13	%	$	466		$	430		$	36			8	%
Net income available to common stockholders (GAAP), excluding restructuring charges and special items:
Net income available to common stockholders (GAAP)	G	$	243		$	216		$	221		$	213		$	190		$	27			13	%	$	53			28	%	$	459		$	399		$	60			15	%
Add: Restructuring charges and special items, net of income tax expense (benefit)			—			—			—			—			25			—			—			(25	)		(100	)		—			31			(31	)		(100	)
Net income available to common stockholders, excluding restructuring charges and special items (non-GAAP)	H	$	243		$	216		$	221		$	213		$	215		$	27			13	%	$	28			13	%	$	459		$	430		$	29			7	%
Return on average common equity, excluding restructuring charges and special items:
Average common equity (GAAP)	I	$	19,768		$	19,567		$	19,359		$	19,261		$	19,391		$	201			1	%	$	377			2	%	$	19,667		$	19,399		$	268			1	%
Return on average common equity, excluding restructuring charges and special items (non-GAAP)	H/I		4.94	%		4.45	%		4.51	%		4.40	%		4.45	%		49	bps					49	bps					4.70	%		4.47	%		23	bps
Return on average tangible common equity and return on average tangible common equity, excluding restructuring charges and special items:
Average common equity (GAAP)	I	$	19,768		$	19,567		$	19,359		$	19,261		$	19,391		$	201			1	%	$	377			2	%	$	19,667		$	19,399		$	268			1	%
Less: Average goodwill (GAAP)			6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876			6,876			—			—
Less: Average other intangibles (GAAP)			2			3			3			4			5			(1	)		(33	)		(3	)		(60	)		2			5			(3	)		(60	)
Add: Average deferred tax liabilities related to goodwill (GAAP)			496			481			468			453			437			15			3			59			14			488			430			58			13
Average tangible common equity (non-GAAP)	J	$	13,386		$	13,169		$	12,948		$	12,834		$	12,947		$	217			2	%	$	439			3	%	$	13,277		$	12,948		$	329			3	%
Return on average tangible common equity (non-GAAP)	G/J		7.30	%		6.61	%		6.75	%		6.60	%		5.90	%		69	bps					140	bps					6.96	%		6.21	%		75	bps
Return on average tangible common equity, excluding restructuring charges and special items (non-GAAP)	H/J		7.30	%		6.61	%		6.75	%		6.60	%		6.67	%		69	bps					63	bps					6.96	%		6.70	%		26	bps
Return on average total assets, excluding restructuring charges and special items:
Average total assets (GAAP)	K	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	3,399			2	%	$	6,658			5	%	$	140,479		$	134,429		$	6,050			5	%
Return on average total assets, excluding restructuring charges and special items (non-GAAP)	F/K		0.69	%		0.65	%		0.64	%		0.65	%		0.64	%		4	bps					5	bps					0.67	%		0.65	%		2	bps
Return on average total tangible assets and return on average total tangible assets, excluding restructuring charges and special items:
Average total assets (GAAP)	K	$	142,179		$	138,780		$	136,298		$	135,103		$	135,521		$	3,399			2	%	$	6,658			5	%	$	140,479		$	134,429		$	6,050			5	%
Less: Average goodwill (GAAP)			6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876			6,876			—			—
Less: Average other intangibles (GAAP)			2			3			3			4			5			(1	)		(33	)		(3	)		(60	)		2			5			(3	)		(60	)
Add: Average deferred tax liabilities related to goodwill (GAAP)			496			481			468			453			437			15			3			59			14			488			430			58			13
Average tangible assets (non-GAAP)	L	$	135,797		$	132,382		$	129,887		$	128,676		$	129,077		$	3,415			3	%	$	6,720			5	%	$	134,089		$	127,978		$	6,111			5	%
Return on average total tangible assets (non-GAAP)	E/L		0.72	%		0.68	%		0.67	%		0.68	%		0.59	%		4	bps					13	bps					0.70	%		0.63	%		7	bps
Return on average total tangible assets, excluding restructuring charges and special items (non-GAAP)	F/L		0.72	%		0.68	%		0.67	%		0.68	%		0.67	%		4	bps					5	bps					0.70	%		0.68	%		2	bps

30

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (Excluding restructuring charges and special items) (CONTINUED)

(dollars in millions, except per-share data)

		QUARTERLY TRENDS																											FOR THE SIX MONTHS ENDED JUNE 30,
																	2Q16 Change																		2016 Change
		2Q16			1Q16			4Q15			3Q15			2Q15			1Q16						2Q15						2016			2015			2015
																	$			%			$			%									$			%
Efficiency ratio and efficiency ratio, excluding restructuring charges and special items:
Efficiency ratio (non-GAAP)	C/A		64.71	%		65.66	%		65.76	%		66.02	%		70.02	%		(95	) bps					(531	) bps					65.18	%		69.27	%		(409	) bps
Efficiency ratio, excluding restructuring charges and special items (non-GAAP)	D/B		64.71	%		65.66	%		65.76	%		66.02	%		66.70	%		(95	) bps					(199	) bps					65.18	%		67.17	%		(199	) bps
Tangible book value per common share:
Common shares - at end of period (GAAP)	M		529,094,976			528,933,727			527,774,428			527,636,510			537,149,717			161,249			—	%		(8,054,741	)		(1	%)		529,094,976			537,149,717			(8,054,741	)		(1	%)
Common stockholders’ equity (GAAP)		$	19,979		$	19,718		$	19,399		$	19,353		$	19,339		$	261			1		$	640			3		$	19,979		$	19,339		$	640			3
Less: Goodwill (GAAP)			6,876			6,876			6,876			6,876			6,876			—			—			—			—			6,876			6,876			—			—
Less: Other intangible assets (GAAP)			2			3			3			3			4			(1	)		(33	)		(2	)		(50	)		2			4			(2	)		(50	)
Add: Deferred tax liabilities related to goodwill (GAAP)			507			494			480			465			450			13			3			57			13			507			450			57			13
Tangible common equity (non-GAAP)	N	$	13,608		$	13,333		$	13,000		$	12,939		$	12,909		$	275			2	%	$	699			5	%	$	13,608		$	12,909		$	699			5	%
Tangible book value per common share (non-GAAP)	N/M	$	25.72		$	25.21		$	24.63		$	24.52		$	24.03		$	0.51			2	%	$	1.69			7	%	$	25.72		$	24.03		$	1.69			7	%
Net income per average common share - basic and diluted, excluding restructuring charges and special items:
Average common shares outstanding - basic (GAAP)	O		528,968,330			528,070,648			527,648,630			530,985,255			537,729,248			897,682			—	%		(8,760,918	)		(2	%)		528,519,489			541,986,653			(13,467,164	)		(2	%)
Average common shares outstanding - diluted (GAAP)	P		530,365,203			530,446,188			530,275,673			533,398,158			539,909,366			(80,985	)		—			(9,544,163	)		(2	)		530,396,871			544,804,268			(14,407,397	)		(3	)
Net income available to common stockholders (GAAP)	G	$	243		$	216		$	221		$	213		$	190		$	27			13		$	53			28		$	459		$	399		$	60			15
Net income per average common share - basic (GAAP)	G/O		0.46			0.41			0.42			0.40			0.35			0.05			12			0.11			31			0.87			0.74			0.13			18
Net income per average common share - diluted (GAAP)	G/P		0.46			0.41			0.42			0.40			0.35			0.05			12			0.11			31			0.87			0.73			0.14			19
Net income available to common stockholders, excluding restructuring charges and special items (non-GAAP)	H		243			216			221			213			215			27			13			28			13			459			430			29			7
Net income per average common share - basic, excluding restructuring charges and special items (non-GAAP)	H/O		0.46			0.41			0.42			0.40			0.40			0.05			12			0.06			15			0.87			0.79			0.08			10
Net income per average common share - diluted, excluding restructuring charges and special items (non-GAAP)	H/P		0.46			0.41			0.42			0.40			0.40			0.05			12			0.06			15			0.87			0.79			0.08			10
Pro forma Basel III fully phased-in common equity tier 1 capital ratio1:
Common equity tier 1 (regulatory)		$	13,768		$	13,570		$	13,389		$	13,200		$	13,270
Less: Change in DTA and other threshold deductions (GAAP)			1			1			2			2			3
Pro forma Basel III fully phased-in common equity tier 1 (non-GAAP)	Q	$	13,767		$	13,569		$	13,387		$	13,198		$	13,267
Risk-weighted assets (regulatory general risk weight approach)		$	119,492		$	116,591		$	114,084		$	112,277		$	112,131
Add: Net change in credit and other risk-weighted assets (regulatory)			228			232			244			243			247
Basel III standardized approach risk-weighted assets (non-GAAP)	R	$	119,720		$	116,823		$	114,328		$	112,520		$	112,378
Pro forma Basel III fully phased-in common equity tier 1 capital ratio (non-GAAP)1	Q/R		11.5	%		11.6	%		11.7	%		11.7	%		11.8	%

¹ Basel III ratios assume certain definitions impacting qualifying Basel III capital, which otherwise will phase in through 2019, are fully phased-in. Ratios also reflect the required US Standardized methodology for calculating RWAs, effective January 1, 2015.

31

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (Excluding restructuring charges and special items) (CONTINUED)

(dollars in millions, except per-share data)

	QUARTERLY TRENDS																							FOR THE SIX MONTHS ENDED JUNE 30,
												2Q16 Change																2016 Change
	2Q16		1Q16		4Q15			3Q15		2Q15		1Q16						2Q15						2016		2015		2015
												$			%			$			%							$			%
Salaries and employee benefits, excluding restructuring charges and special items:
Salaries and employee benefits (GAAP)	$	432	$	425	$	402		$	404	$	411	$	7			2	%	$	21			5	%	$	857	$	830	$	27			3	%
Less: Restructuring charges and special items		—		—		(2	)		—		6		—			—			(6	)		(100	)		—		5		(5	)		(100	)
Salaries and employee benefits, excluding restructuring charges and special items (non-GAAP)	$	432	$	425	$	404		$	404	$	405	$	7			2	%	$	27			7	%	$	857	$	825	$	32			4	%
Outside services, excluding restructuring charges and special items:
Outside services (GAAP)	$	86	$	91	$	104		$	89	$	99	($	5	)		(5	%)	($	13	)		(13	%)	$	177	$	178	($	1	)		(1	%)
Less: Restructuring charges and special items		—		—		2			—		16		—			—			(16	)		(100	)		—		24		(24	)		(100	)
Outside services, excluding restructuring charges and special items (non-GAAP)	$	86	$	91	$	102		$	89	$	83	($	5	)		(5	%)	$	3			4	%	$	177	$	154	$	23			15	%
Occupancy, excluding restructuring charges and special items:
Occupancy (GAAP)	$	76	$	76	$	74		$	75	$	90	$	—			—	%	($	14	)		(16	%)	$	152	$	170	($	18	)		(11	%)
Less: Restructuring charges and special items		—		—		—			—		15		—			—			(15	)		(100	)		—		17		(17	)		(100	)
Occupancy, excluding restructuring charges and special items (non-GAAP)	$	76	$	76	$	74		$	75	$	75	$	—			—	%	$	1			1	%	$	152	$	153	($	1	)		(1	)%
Equipment expense, excluding restructuring charges and special items:
Equipment expense (GAAP)	$	64	$	65	$	67		$	62	$	65	($	1	)		(2	%)	($	1	)		(2	%)	$	129	$	128	$	1			1	%
Less: Restructuring charges and special items		—		—		—			—		—		—			—			—			—			—		1		(1	)		(100	)
Equipment expense, excluding restructuring charges and special items (non-GAAP)	$	64	$	65	$	67		$	62	$	65	($	1	)		(2	%)	($	1	)		(2	%)	$	129	$	127	$	2			2	%
Other operating expense, excluding restructuring charges and special items:
Other operating expense (GAAP)	$	128	$	115	$	125		$	133	$	139	$	13			11	%	($	11	)		(8	%)	$	243	$	272	($	29	)		(11	%)
Less: Restructuring charges and special items		—		—		—			—		3		—			—			(3	)		(100	)		—		3		(3	)		(100	)
Other operating expense, excluding restructuring charges and special items (non-GAAP)	$	128	$	115	$	125		$	133	$	136	$	13			11	%	($	8	)		(6	%)	$	243	$	269	($	26	)		(10	%)
Restructuring charges and special expense items include:
Restructuring charges	$	—	$	—	$	—		$	—	$	25	$	—			—	%	($	25	)		(100	%)	$	—	$	26	($	26	)		(100	%)
Special items		—		—		—			—		15		—			—			(15	)		(100	)		—		24		(24	)		(100	)
Restructuring charges and special expense items	$	—	$	—	$	—		$	—	$	40	$	—			—	%	($	40	)		(100	%)	$	—	$	50	($	50	)		(100	%)

32

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS

(dollars in millions)

		THREE MONTHS ENDED JUNE 30,												THREE MONTHS ENDED MAR 31,											THREE MONTHS ENDED DEC 31,
		2016												2016											2015
		Consumer Banking			Commercial Banking			Other			Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other		Consolidated
Net income (GAAP)	A	$	90		$	164		($	11	)	$	243		$	71		$	133		$	19	$	223		$	67		$	152		$	2	$	221
Less: Preferred stock dividends			—			—			—			—			—			—			7		7			—			—			—		—
Net income available to common stockholders	B	$	90		$	164		($	11	)	$	243		$	71		$	133		$	12	$	216		$	67		$	152		$	2	$	221
Return on average tangible common equity
Average common equity (GAAP)		$	5,110		$	5,040		$	9,618		$	19,768		$	5,089		$	4,790		$	9,688	$	19,567		$	4,831		$	4,787		$	9,741	$	19,359
Less: Average goodwill (GAAP)			—			—			6,876			6,876			—			—			6,876		6,876			—			—			6,876		6,876
Average other intangibles (GAAP)			—			—			2			2			—			—			3		3			—			—			3		3
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			496			496			—			—			481		481			—			—			468		468
Average tangible common equity (non-GAAP)	C	$	5,110		$	5,040		$	3,236		$	13,386		$	5,089		$	4,790		$	3,290	$	13,169		$	4,831		$	4,787		$	3,330	$	12,948
Return on average tangible common equity (non-GAAP)	B/C		7.09	%		13.04	%		NM			7.30	%		5.59	%		11.19	%		NM		6.61	%		5.50	%		12.57	%		NM		6.75	%
Return on average total tangible assets
Average total assets (GAAP)		$	55,660		$	47,388		$	39,131		$	142,179		$	55,116		$	45,304		$	38,360	$	138,780		$	54,065		$	43,835		$	38,398	$	136,298
Less: Average goodwill (GAAP)			—			—			6,876			6,876			—			—			6,876		6,876			—			—			6,876		6,876
Average other intangibles (GAAP)			—			—			2			2			—			—			3		3			—			—			3		3
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			496			496			—			—			481		481			—			—			468		468
Average tangible assets (non-GAAP)	D	$	55,660		$	47,388		$	32,749		$	135,797		$	55,116		$	45,304		$	31,962	$	132,382		$	54,065		$	43,835		$	31,987	$	129,887
Return on average total tangible assets (non-GAAP)	A/D		0.65	%		1.39	%		NM			0.72	%		0.52	%		1.18	%		NM		0.68	%		0.49	%		1.37	%		NM		0.67	%
Efficiency ratio
Noninterest expense (GAAP)	E	$	632		$	186		$	9		$	827		$	616		$	187		$	8	$	811		$	624		$	180		$	6	$	810
Net interest income (GAAP)			602			314			7			923			581			300			23		904			565			301			4		870
Noninterest income (GAAP)			219			122			14			355			208			99			23		330			226			107			29		362
Total revenue	F	$	821		$	436		$	21		$	1,278		$	789		$	399		$	46	$	1,234		$	791		$	408		$	33	$	1,232
Efficiency ratio (non-GAAP)	E/F		76.98	%		42.88	%		NM			64.71	%		78.08	%		46.74	%		NM		65.66	%		78.85	%		44.02	%		NM		65.76	%

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NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS (CONTINUED)

(dollars in millions)

		THREE MONTHS ENDED SEPT 30,											THREE MONTHS ENDED JUNE 30,
		2015											2015
		Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other			Consolidated
Net income (loss) (GAAP)	A	$	68		$	145		$	7	$	220		$	66		$	135		($	11	)	$	190
Less: Preferred stock dividends			—			—			7		7			—			—			—			—
Net income available to common stockholders	B	$	68		$	145		$	—	$	213		$	66		$	135		($	11	)	$	190
Return on average tangible common equity
Average common equity (GAAP)		$	4,791		$	4,722		$	9,748	$	19,261		$	4,681		$	4,625		$	10,085		$	19,391
Less: Average goodwill (GAAP)			—			—			6,876		6,876			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			4		4			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			453		453			—			—			437			437
Average tangible common equity (non-GAAP)	C	$	4,791		$	4,722		$	3,321	$	12,834		$	4,681		$	4,625		$	3,641		$	12,947
Return on average tangible common equity (non-GAAP)	B/C		5.67	%		12.24	%		NM		6.60	%		5.66	%		11.69	%		NM			5.90	%
Return on average total tangible assets
Average total assets (GAAP)		$	53,206		$	43,113		$	38,784	$	135,103		$	52,489		$	42,617		$	40,415		$	135,521
Less: Average goodwill (GAAP)			—			—			6,876		6,876			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			4		4			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			453		453			—			—			437			437
Average tangible assets (non-GAAP)	D	$	53,206		$	43,113		$	32,357	$	128,676		$	52,489		$	42,617		$	33,971		$	129,077
Return on average total tangible assets (non-GAAP)	A/D		0.51	%		1.34	%		NM		0.68	%		0.51	%		1.27	%		NM			0.59	%
Efficiency ratio
Noninterest expense (GAAP)	E	$	623		$	175		$	—	$	798		$	613		$	181		$	47		$	841
Net interest income (GAAP)			556			299			1		856			544			286			10			840
Noninterest income (GAAP)			235			100			18		353			230			108			22			360
Total revenue	F	$	791		$	399		$	19	$	1,209		$	774		$	394		$	32		$	1,200
Efficiency ratio (non-GAAP)	E/F		78.72	%		43.75	%		NM		66.02	%		79.25	%		46.07	%		NM			70.02	%

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NON-GAAP MEASURES - SEGMENTS (CONTINUED)

(dollars in millions)

		FOR THE SIX MONTHS ENDED JUNE 30,
		2016											2015
		Consumer Banking			Commercial Banking			Other		Consolidated			Consumer Banking			Commercial Banking			Other			Consolidated
Net income (loss) (GAAP)	A	$	161		$	297		$	8	$	466		$	127		$	282		($	10	)	$	399
Less: Preferred stock dividends			—			—			—		—			—			—			—			—
Net income available to common stockholders	B	$	161		$	297		$	8	$	466		$	127		$	282		($	10	)	$	399
Return on average tangible common equity
Average common equity (GAAP)		$	5,099		$	4,915		$	9,653	$	19,667		$	4,665		$	4,576		$	10,158		$	19,399
Less: Average goodwill (GAAP)			—			—			6,876		6,876			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			2		2			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			488		488			—			—			430			430
Average tangible common equity (non-GAAP)	C	$	5,099		$	4,915		$	3,263	$	13,277		$	4,665		$	4,576		$	3,707		$	12,948
Return on average tangible common equity (non-GAAP)	B/C		6.34	%		12.14	%		NM		6.96	%		5.48	%		12.41	%		NM			6.21	%
Return on average total tangible assets
Average total assets (GAAP)		$	55,388		$	46,346		$	38,745	$	140,479		$	52,048		$	42,114		$	40,267		$	134,429
Less: Average goodwill (GAAP)			—			—			6,876		6,876			—			—			6,876			6,876
Average other intangibles (GAAP)			—			—			2		2			—			—			5			5
Add: Average deferred tax liabilities related to goodwill (GAAP)			—			—			488		488			—			—			430			430
Average tangible assets (non-GAAP)	D	$	55,388		$	46,346		$	32,355	$	134,089		$	52,048		$	42,114		$	33,816		$	127,978
Return on average total tangible assets (non-GAAP)	A/D		0.58	%		1.29	%		NM		0.70	%		0.49	%		1.35	%		NM			0.63	%
Efficiency ratio
Noninterest expense (GAAP)	E	$	1,248		$	373		$	17	$	1,638		$	1,209		$	354		$	88		$	1,651
Net interest income (GAAP)			1,183			614			30		1,827			1,077			562			37			1,676
Noninterest income (GAAP)			427			221			37		685			449			208			50			707
Total revenue	F	$	1,610		$	835		$	67	$	2,512		$	1,526		$	770		$	87		$	2,383
Efficiency ratio (non-GAAP)	E/F		77.52	%		44.73	%		NM		65.18	%		79.25	%		46.04	%		NM			69.27	%

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FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are forward-looking statements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “goals,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.”

Forward-looking statements are based upon the current beliefs and expectations of management, and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation:

• negative economic conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense;

• the rate of growth in the economy and employment levels, as well as general business and economic conditions;

• our ability to implement our strategic plan, including the cost savings and efficiency components, and achieve our indicative performance targets;

• our ability to remedy regulatory deficiencies and meet supervisory requirements and expectations;

• liabilities and business restrictions resulting from litigation and regulatory investigations;

• our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;

• the effect of the current low interest rate environment or changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale;

• changes in interest rates and market liquidity, as well as the magnitude of such changes, which may reduce interest margins, impact funding sources and affect the ability to originate and distribute financial products in the primary and secondary markets;

• the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;

• financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;

• a failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers, including as a result of cyber attacks; and

• management’s ability to identify and manage these and other risks.

In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or share repurchases will depend on our financial condition, earnings, cash needs, regulatory constraints, capital requirements (including requirements of our subsidiaries), and any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will pay any dividends to holders of our common stock, or as to the amount of any such dividends. More information about factors that could cause actual results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in Part I, Item 1A in our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on February 26, 2016.

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